Citigroup (C) has lowered its 2025-end price target for the S&P 500 Index (SPX) to 5,600 from 6,500. This revision reflects a more cautious stance, driven by expectations of a lower earnings per share (EPS) for 2025.
Citi now projects EPS at $255, down from the previous forecast of $270, citing ongoing market volatility and economic uncertainties.
Citi Revises S&P 500 Outlook amid Tariff Uncertainty
This revised outlook follows a period of significant market volatility, marked by sharp declines and subsequent rallies. The S&P 500 saw a sharp decline due to Donald Trump’s reciprocal tariffs policy and retaliation from other countries, pushing the index into correction territory. However, a temporary 90-day pause in tariff escalations fueled a market rally.
Citi noted that the initial optimism at the start of the year has shifted to uncertainty. This change is attributed to the Trump administration’s tariff policies, which are likely to disrupt global trade and put pressure on corporate earnings.
Despite the challenges, Citi remains optimistic about the long-term resilience of the S&P 500. The firm notes that the recent pause in tariff escalation has provided an opportunity for potential negotiations, which could stabilize market sentiment.
3 “Strong Buy” S&P 500 Stocks with Plenty of Upside Potential
Amid the S&P 500’s decline, investors seeking stocks within the index with strong upside could consider First Solar (FSLR) and Micron (MU).
Micron: Micron is well-positioned for growth as demand for AI-focused memory solutions like high-bandwidth memory (HBM) and DRAM continues to rise. MU’s HBM3E products are gaining recognition for their efficiency and performance, bolstering Micron’s position in the AI sector. Also, partnerships with key tech players, such as Nvidia (NVDA), further solidify its role in supporting AI workloads.
Turning to Wall Street, MU stock has a Strong Buy consensus rating based on 21 Buys and three Holds assigned in the last three months. At $129.22, the average Micron stock price target implies an 85.79% upside potential.
First Solar: Strong demand for renewable energy and its advanced solar panel technology aid FSLR’s growth. Further, the company recently expanded its manufacturing capacity with new facilities in Alabama and Louisiana. Also, the company’s investment in R&D, including a new Ohio center, enables it to innovate new solar technology.
On TipRanks, FSLR stock has a Strong Buy consensus rating based on 20 Buys and two Holds assigned in the last three months. At $243.90, the average First Solar price target implies a 93.68% upside potential.
Concluding Thoughts
While Citi’s revised S&P 500 outlook reflects caution amid economic uncertainty, the index still offers opportunities for growth-focused investors. Companies like Micron and First Solar, with their strong fundamentals, have robust upside potential. Investors could consider taking a deeper look at the two stocks during these uncertain times.