A dimming earnings outlook for U.S. companies means that the S & P 500 will likely finish the year lower, according to Jefferies. Desh Peramunetilleke, Jefferies’ head of quantitative strategy, said in a note to clients Tuesday that the firm was lowering its S & P 500 target to 5,300. That is about 2% below where the index closed Monday. “We cut our 2025 base case target to 5300 (from 6000), factoring in lower EPS growth and a higher risk premium. Sectorwise, we favor defensives over cyclicals,” Peramunetilleke said. .SPX 5D mountain The S & P 500 closed just above 5,400 on Monday. As part of that forecast, Jefferies projects the S & P 500 to trade at 19-times earnings, which is in line with the 10-year average. However, the firm also projects earnings growth to be 5.1% in 2025, well below the roughly 11% consensus estimate. “While we are not yet building in a recession, even the current pace of downgrades will see EPS growth fall,” the note said. The 5,300 target from Jefferies is below the average of 6,003 from other top strategists in the CNBC Market Strategist Survey . However, it is not the lowest on the Street, with JPMorgan at 5,200 . Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange. In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12. Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!
Jefferies cuts S&P 500 target, sees stocks falling from here
