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Benzinga
138 days

Goldman Sachs Sees Broad EPS Pressure Across Capital Markets, Highlights Brookfield As A Standout

1. Goldman Sachs predicts macro uncertainty will impact EPS forecasts for Capital Markets stocks. 2. Estimated EPS for 2025 is 5% below consensus averages, excluding Exchanges. 3. Brokers and Wealth Advisors face an estimated 4% downside in earnings forecasts. 4. Charles Schwab shows resilience with a 5% EPS beat; Stifel misses by 10%. 5. Overall, EPS risks for Alternative Manager stocks could reach 30% downside.

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FAQ

Why Bearish?

The anticipated decline in EPS estimates, especially for capital markets stocks, parallels past financial downturns when earnings estimates fell short, negatively influencing stock performance overall. The underperformance forecasts could weigh particularly on financial sector stocks, which have significant representation in the S&P 500.

How important is it?

The article outlines key factors affecting EPS projections and therefore the overall profitability of the financial sector is crucial for the S&P 500, indicating moderate importance given the S&P hosting several financial sector constituents.

Why Short Term?

The expected lower short-term interest rates and weaker equity markets will likely manifest in the near-term performance of S&P 500, much like previous quarters where market sentiment shifted rapidly due to earnings downgrades.

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