Though Citi Research (C, Financial) expects consensus expectations for 2025 to drop, it forecasts "solid improvement" in bottom-line expansion for 2024.
Driven by mid-single-digit growth in mega-cap technology businesses, Citi strategists led by Scott Chronert stressed durability in Q3 profits in a report posted late Sunday. "We expected a beat-and-hold dynamic for the quarter, with positive surprises to counter cuts to Q4 expectations," Chronert said.
Citi kept its year-end prediction for the S&P 500 (SP500) at 5,600 but pointed out that a possible surge might bring the index closer to its 6,100 bull-case scenario. The strategists issued a warning, suggesting that the new Trump government brings unpredictability. Although the first post-election pricing action has been robust, as Cabinet appointments take shape, the emphasis is moving from policy perception to policy uncertainty.
Chronert also mentioned how a mixed macroeconomic environment and a slowdown in cyclical market areas could restrict future growth potential. Notwithstanding these hazards, Citi sees "policy effects" during the Trump presidency as a wild card that might affect earnings and market sentiment into 2025.
