Over the past three trading sessions, the S&P 500 has plunged 10.7 per cent. The Index is now down 17.6 per cent from its record closing high of 6,144 set on Feb. 19. As a result of this sharp slide, 49 per cent of stocks in the S&P 500 have entered oversold territory from a technical analysis perspective.
The price-to-earnings multiple for the S&P 500 has contracted significantly. As of April 7, the S&P 500 was trading at a P/E ratio of 18.7 times the 2025 consensus earnings estimate, below the 10-year average multiple of 19.9 times, according to data from Bloomberg. In January, the P/E multiple was above 25 times.
Earnings growth expectations have moderated ahead of the upcoming earnings season. According to a report from LSEG I/B/E/S published on April 4, year-over-year earnings growth is forecast to come in at 7.8 per cent in the first quarter of 2025, 10 per cent in the second quarter, 12.3 per cent in the third quarter and 10.8 per cent in the fourth quarter. Just two months ago, as of Feb. 3, year-over-year earnings growth forecasts stood at 10.2 per cent for the first quarter, 11.3 per cent for the second quarter, 12.9 per cent for the third quarter and 15.8 per cent for the fourth quarter.
Now, here’s a look at analysts’ current target prices, recommendations, forecast returns and yields for all securities in the S&P 500 grouped by sector and ranked according to their expected price returns (excluding dividend and distribution income). The posted target price for each security is an average of all available target prices from analysts. A target price typically reflects an expected share or unit price 12 months from now based on an analyst’s financial modelling, such as a discounted cash flow or sum-of-the-parts model. The table also includes RSI (relative strength index) values. Securities with RSI readings of 30 or lower reflect an oversold condition.
It’s important to note that high target prices, which imply stellar returns that seem unbelievable may be just that - unrealistic. At times, when a stock price falls analysts may maintain their bullish expectations, inflating the forecast return. In addition, an outlier (extreme target price) can skew the average target price, to the upside or downside, particularly when the number of analysts covering a stock is low. Don’t let a huge projected gain lure you into a position – it is critical to look at the company and industry fundamentals.
Click here to download an Excel version of the report.
-