Leading U.S. investment bank Goldman Sachs (GS) has lowered its forecast for the benchmark S&P 500 index for the second time this month amid growing signs of weakness in equity markets.
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David Kostin, the Chief U.S. Equity Strategist at Goldman Sachs, has cut his year-end target for the S&P 500 index to 5,700 points, down 8% from a previous estimate issued earlier in March of 6,200. Kostin cited a higher recession risk and tariff-related uncertainty as the main reasons for his second downgrade of the S&P 500 in only a few weeks.
“If the growth outlook and investor confidence deteriorate even further, valuations could decline much more than we forecast,” wrote Kostin in a note to clients. “We continue to recommend investors watch for an improvement in the growth outlook, more asymmetry in market pricing, or depressed positioning before trying to trade a market bottom.”
From Bad to Worse
Goldman Sachs’ new target implies that the S&P 500 will likely only gain about 2% this year and is among the most bearish forecasts on Wall Street. Kostin, who is a highly respected forecaster on Wall Street, began the year with an S&P 500 year-end target of 6,500. He lowered that forecast to 6,200 on March 11 due to tariff uncertainties and a steady decline in technology stocks.
Stocks in the U.S. and abroad continue to selloff amid mounting fears over the impact of Trump’s trade war on the global economy. The White House is preparing to implement reciprocal tariffs on “all countries” starting on April 2, a development that has led investors to flee equity markets for the safety of gold and bonds.
Is GS Stock a Buy?
Goldman Sachs stock has a consensus Moderate Buy rating among 15 Wall Street analysts. That rating is based on 10 Buy and five Hold recommendations assigned in the last three months. The average GS price target of $653.31 implies 20.32% upside from current levels.
