Mubasher: Citigroup has downgraded its stance on US equities and cut its S&P 500 index target for 2025 as it expects tariff uncertainty to affect corporate America's earnings, Reuters reported.

Goldman Sachs and Bank of America (BofA) also slashed their benchmark index target below the 6,000 mark.

Citigroup’s current year-end target stands at 5,800 which is below its previous estimate of 6,500, while it also cut the index's earnings-per-share (EPS) projection to $255 from $270.

"Both tariff assumptions and recent signs of macro slowing trigger the downward revision...(and)some valuation compression is also warranted as a function of policy uncertainty," Reuters cited Citigroup analysts in a note late last week.

In a separate note on Monday, 14 April, the Wall Street brokerage cut its view on US stocks to "neutral" from "overweight" amid rising valuations and mounting downgrade pressures.

"The drivers of “exceptionalism” are fading, both from a GDP and EPS perspective. Tariffs, as they stand, could negatively impact US EPS the most," Citigroup said, adding that global recession concerns "abating for now, but risks remain."

On the global equity strategy front, Citigroup's preferred growth sector is technology, for cyclical sector it is financials, and its preferred defensive is health care.

 

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