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Goldman Mark S&P 500 Year-End Call Lower

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Late on Friday Goldman Sachs noted that “although S&P 500 firms posted much better-than-expected Q1 EPS growth of 11%, investors have been mauled by a 18% near-bear market plunge since the index peaked on January 3rd. We boost our 2022 EPS growth forecast to +8% (from +5) and maintain our 2023 growth estimate of 6%. Our sales, margin, and EPS estimates remain below bottom-up consensus. We cut our year-end target to 4,300 (from 4,700) to reflect higher interest rates and slower economic growth than we previously assumed. Our new baseline forecast assumes no recession and implies the P/E ends the year unchanged at 17x. A recession would see the index fall by 11% to 3,600 as the P/E drops to 15x. Focus on high vs. low margin growth stocks.”

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Late on Friday Goldman Sachs noted that “although S&P 500 firms posted much better-than-expected Q1 EPS growth of 11%, investors have been mauled by a 18% near-bear market plunge since the index peaked on January 3rd. We boost our 2022 EPS growth forecast to +8% (from +5) and maintain our 2023 growth estimate of 6%. Our sales, margin, and EPS estimates remain below bottom-up consensus. We cut our year-end target to 4,300 (from 4,700) to reflect higher interest rates and slower economic growth than we previously assumed. Our new baseline forecast assumes no recession and implies the P/E ends the year unchanged at 17x. A recession would see the index fall by 11% to 3,600 as the P/E drops to 15x. Focus on high vs. low margin growth stocks.”