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Goldman Sachs lowers its S&P 500 price target for the 3rd time this year to 4300
Posted on 5/16/22 at 1:19 pm
Posted on 5/16/22 at 1:19 pm
quote:
The S&P 500 is set to continue its decline to 3,600 if an economic recession materializes sometime over the next year, Goldman Sachs said in a note on Friday.
The bank lowered its year-end S&P 500 price target for the third time this year to 4,300, representing potential upside of 8% from current levels. Goldman's initial 2022 price target for the S&P 500 was 5,100, which was then cut to 4,900 in February. Its price target was subsequently cut again in March to 4,700.
Despite the subdued bullishness, Goldman still expects corporate earnings to grow 8% in 2022, which represents an increase from its prior forecast of 5%. Goldman's year-end price target for the stock market assumes no recession materializes and implies the price-to-earnings ratio for the broader market remains unchanged at 17x.
In a recession, which Goldman assigns a 35% probability of happening in the next two years, the bank expects the price-to-earnings valuation multiple on the S&P 500 to fall to 15x, driving much of the downside for stocks.
LINK
I'll be happy if the S&P closes above 4000 this year with all the bad news and headwinds facing the economy.
This post was edited on 5/16/22 at 1:20 pm
Posted on 5/16/22 at 2:20 pm to Street Hawk
I don't know if I am just a negative Nancy or GS and you have your heads in the sand. The pain is just getting started.
Posted on 5/16/22 at 3:02 pm to Street Hawk
quote:
In a recession, which Goldman assigns a 35% probability of happening in the next two years
Isn't a recession almost assured based on Q1 GDP and tracking economic indicators for the first half of Q2?
Or is this part of the play where the oligarchs and their media sycophants redefine "recession" to maximize their profits on the downturn?
Posted on 5/16/22 at 5:01 pm to GREENHEAD22
quote:
don't know if I am just a negative Nancy or GS and you have your heads in the sand. The pain is just getting started.
GS and others are trying to make logical and unemotional predictions about a market that can often be illogical and emotional.
It’s a tough thing to do, but it’s better than “I think it will keep going up/down because I just do.”
Posted on 5/16/22 at 5:03 pm to AUFANATL
quote:
Isn't a recession almost assured based on Q1 GDP and tracking economic indicators for the first half of Q2?
No.
Most Q2 forecasts are for 1.75%-4% annualized growth, including the GDPNow estimate from the Atlanta Fed at 1.8%.
Posted on 5/16/22 at 5:38 pm to slackster
Energy prices are not getting better anytime soon, energy drives most other sectors. Combine that with rate raises and not sure how anyone can see upside the rest of the year.
Hell I would argue nothing has really set in yet.
Hell I would argue nothing has really set in yet.
Posted on 5/16/22 at 5:58 pm to Street Hawk
I been looking at 3600 as likely next--this is thinking positive because it can go much lower IMHO. I doubt we get back above 4100 by end of year.
Cheers hope I am wrong.
Cheers hope I am wrong.
Posted on 5/16/22 at 7:54 pm to GREENHEAD22
quote:
Hell I would argue nothing has really set in yet.
Yeah but the market is trying to price it in. There is a reason earnings are going up while the P in P/E is coming way down, just as the P went way up with the expectations of a boom coming out of the Covid recession.
Ultimately the economy is currently substantially better off right now than the average MT poster implies. GS and others are throwing out 1/3rd or lower chances of recession while this place thinks we’re currently in one.
This post was edited on 5/16/22 at 7:59 pm
Posted on 5/16/22 at 9:29 pm to slackster
quote:
economy is currently substantially better off right now than the average MT poster implies
It’s true. The consumer is healthier than they’ve been in decades from several different metrics. The corporate environment is similar. Banks are extremely well capitalized.
Sure, some business will struggle because they can roll short term debts into new zero rates… but living off debt to grow rev is a shite business plan. The good companies will weather this storm just fine.
Posted on 5/16/22 at 10:00 pm to LSUcam7
quote:
The good companies will weather this storm just fine.
This is often under appreciated.
Posted on 5/16/22 at 11:17 pm to LSUcam7
quote:
It’s true. The consumer is healthier than they’ve been in decades from several different metrics. The corporate environment is similar. Banks are extremely well capitalized.
I agree with this but if the cost of oil/ gas/food prices continue at current rates or keeps increasing then that Healthy Consumer will cut spending and not keep buying while companies keep raising prices. There is a breaking point for that Healthy Consumer and the 3 things listed above for another year will be the undoing of it.
Posted on 5/17/22 at 6:39 am to GREENHEAD22
quote:
Energy prices are not getting better anytime soon, energy drives most other sectors. Combine that with rate raises and not sure how anyone can see upside the rest of the year.
MY thoughts also. And food will continue to climb. The rate will slow because but continue to climb. Then the goofy administration will say see we brought down inflation. However I don't see food prices coming down to an adjusted 2-3% rate any time soon if ever. Even of the fed raises rates the supply side is so screwed up prices won't have to drop.
Very long road ahead
Posted on 6/17/22 at 7:07 pm to Matt225
Gee where is the S&P now? ohh 3660. Next major level of support is 3300ish. Lets go Brandon!
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