Citibank maintains a bullish stance on the stock market, with strong performance in the fourth quarter.

LootboxPhobia · 2026-02-24T01:31:41+00:00

Citigroup stated in its client report that the profit trend in the fourth quarter supports the outlook for 2026, with S&P 500 earnings expected to be $320 and the 2025 earnings forecast raised to $275. Analysts believe that sales growth for large-cap companies is accelerating, but small and mid-cap companies need to improve profit margins. Despite uncertainties surrounding tariff policies, the fundamental outlook remains unchanged.

LootboxPhobia

2026-02-24 01:31:41

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Investing.com — In a client report released on Monday, Citigroup stated that the profit trend in the fourth quarter continues to support its outlook for 2026. Analyst Scott Chronert emphasized that the bank “maintains a constructive fundamental outlook for 2026, supported by positive profit trends in Q4 2025 and an acceleration in sales growth trajectories across various market cap companies.”

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Citigroup added that consensus earnings expectations for this year have remained unusually stable, which the bank considers a favorable signal at this point.

Chronert stated that Citigroup’s 2026 earnings forecast for the S&P 500 is $320, higher than the market consensus, citing “a sustained soft landing environment and tailwinds from AI spending.”

The bank believes that the recent International Emergency Economic Powers Act (IEEPA) ruling “should have a marginal positive impact on earnings,” although volatility related to tariffs remains a risk as policy uncertainty reemerges.

Citigroup pointed out that the latest earnings season “surprised positively, aligning with our +4% expectation,” leading to an upward revision of its full-year 2025 earnings estimate to approximately $275.

The bank emphasized that the forecast for 2026 “remains stable at the index level,” which is encouraging given that guidance adjustments are typically made at the start of the year.

It also noted that sales momentum for large-cap companies is strengthening, observing that “the sales and profit trajectories of large stocks have shown an accelerating trend over the past year.”

However, the bank indicated that small- and mid-cap companies need better profit margins to meet growth expectations.

Regarding AI, Citigroup believes that disruptive concerns may persist but “will be more reflected in valuations rather than in the earnings outlook for 2026.”

Despite uncertainties related to tariffs following a recent Supreme Court ruling, Citigroup’s broader fundamental outlook remains unchanged.

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