Another day, another goal reduced for the S&P 500.
Ed Yardeni, the president and chief investment strategist of Yardeni Research, was one of the leading bulls on Wall Street, thus his downgrade is noteworthy for several reasons. (As of pixel time, Oppenheimer has the highest projection, aiming for 7,100 for the S&P 500, which would now need to rise 27% over nine months to reach.)
The way he contrasted his opinion with Goldman Sachs’, which this week reduced its S&P 500 goal from 6,500 to 6,200, is also distinctive.
“We hold Goldman Sachs’ strategists and economists in high regard. That’s because they frequently share our outlook on the financial markets and the economy,” he explains. “However, it seems to us that they tend to tweak their forecasts faster and more often in response to new data than we do because we tend to stick to our base case scenarios longer.”
According to Yardeni, every strategy has benefits. He points out that occasionally further data proves to be consistent with the original story, while other times the data that was first reported is removed.
“The latest batch of economic indicators released on Monday, Tuesday, and Wednesday supported our resilient economy scenario with subdued inflation,” according to him. The statement highlights the “shotgun approach to paring the federal workforce” and tariffs that appear to be less of a bargaining strategy than the desired policy. “However, we can’t ignore the potential stagflationary impact of the policies that Trump 2.0 is currently implementing haphazardly.”
Therefore, Yardeni remains committed to his prediction that the total earnings of S&P 500 businesses would be $285 per share, which is significantly higher than Goldman’s projection of $262 per share.
However, he is ignoring the value multiple and is now anticipating a range of 18 to 20 rather than 18 to 22.
This reduces Yardeni’s best-case scenario from 7,000 to 6,400, as well as his year-end 2026 outlook from 8,000 to 7,200. He has lowered his “worst-case scenario” for the end of 2025 to 5,800.
