Analysts on Wall Street are split over the profit forecast for Corporate America in the upcoming year, with differing views on the impact of potential economic challenges.
Citigroup remains optimistic about the resilience of earnings, despite possible economic downturns, while JPMorgan anticipates pressures on revenue and margins due to diminishing pricing power.
This division follows a recent positive turn where the S&P 500 reported a better-than-expected profit increase of 4% in Q3, signaling an end to an earnings recession. However, concerns persist regarding high interest rates and consumer spending, as highlighted by retail leaders Target and Walmart (NYSE:WMT).
Despite these concerns, there is an 11% rise in corporate profits projected for 2024, even though a minor decline is expected for this year's earnings. Citigroup suggests that forthcoming lowered analysts' forecasts could present an opportunity for companies to outperform expectations. Reflecting their earlier confidence in July, Citi analysts had raised the S&P 500 target to approximately 4,600 points, which aligns closely with current levels.
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