Catenaa, Wednesday, March 26, 2025- Barclays has slashed their year-end S&P 500 target to 5,900 with deteriorating economic data and reduced earnings power of the listed companies.
Barclays Strategist Venu Krishna slashed his 2025 S&P 500 price target to 5,900 from 6,600 on Wednesday with deteriorating US economic data.
The estimate cut reflects Barclay’s expectation that S&P 500 companies will have reduced earnings power in large part due to tariffs from the Trump administration. The S&P 500 currently sits at 5,822, down about 2.3% year to date.
Barclays also cut the S&P 500 earnings-per-share estimate to $262 from $271.
Barclays’s base case for tariffs assumes “no further escalation of China tariffs, Trump’s aims for Canada and Mexico tariffs are primarily political” and reciprocal tariffs amount to 5% on the rest of the world.
Barclays follows the likes of Goldman Sachs which cut its S&P 500 price target this month to 6,200 from their earlier target of 6,500.
Krishna also cut his views on the economically sensitive Consumer Discretionary and Industrials sectors to Negative from Neutral.
“We think it will be tough for stocks to work versus deteriorating consumer sentiment, lower growth, higher inflation, and tariffs,” Krishna wrote. “Industrials look expensive versus history and are exposed to both trade policy and tenuous manufacturing PMI amid factories’ front-running tariffs and government contract cancellations.”
Barclays upgraded its outlook on Financials to Positive from Neutral, citing the potential for deregulation this year after tariff issues are settled.
The latest US economic data showed that spending at US retailers last month was much weaker than expected, per the latest retail sales report. This is on top of weakness in consumer confidence data and various Fed activity surveys.
