March 19, 2020 / 11:38 PM / 2 months ago

Factbox: Banks cut S&P 500 earnings, other targets due to coronavirus

NEW YORK (Reuters) - Strategists from top U.S. financial firms have been cutting their earnings per share and other targets for the S&P 500 .SPX due to the expected impact of the coronavirus pandemic on corporate results. Here are some of their views:

** In a note Thursday, Bank of America Merrill Lynch’s head of U.S. equity and quantitative strategy, Savita Subramanian, said the firm has slashed its 2020 EPS view from $169 to $138, implying a 15% year-over-year decline.

The revised view came as the bank’s economics team declared that “The U.S. recession is here,” and noted that the second quarter will be “brutal” with a 12% quarter-on-quarter seasonally adjusted annual rate drop.

** Also on Thursday, Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets, came out with a second set of adjustments to S&P 500 forecasts in a note. For S&P 500 EPS, she said RBC has lowered its full-year 2020 forecast to $139 from $165, while it has reinstated its 2021 forecast of $158. She said RBC also reduced its year-end 2020 S&P 500 price target from 3,279 to 2,750. The S&P 500 closed at 2,409.39 on Thursday.

“Our new forecasts anticipate a 16% drop in EPS and a 15% drop in price for the year as a whole,” she wrote.

** Wells Fargo Investment Institute on March 6 cut its EPS targets for several equity indexes, including a lowering of the S&P 500 to $166 from the prior view of $172. WFII’s year-end S&P 500 target remains a 3,260 to 3,440 range, “balancing lower earnings but a higher valuation” and they do not anticipate a U.S. economic recession.

Reporting by Caroline Valetkevitch; Editing by Leslie Adler, David Gregorio and Daniel Wallis

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