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박재훈투영인 프로필 사진박재훈투영인
Goldman Sachs Report: Magnificent 7 Decline and 2025 S&P 500 Target Cut (Mar 11, 2025)
created At: 3/17/2025
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This analysis was written from a neutral perspective. We advise you to always make careful and well-informed investment decisions.
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Fact
Mag 7 Plunges: 3-week drop of 14% → Driving S&P 500 decline. S&P 500 Target Lowered: 2025 year-end target cut from 6,500 to 6,200 (-4%). EPS Growth Outlook Reduced: 9% → 7%. P/E Ratio Lowered: 21.5x → 20.6x. Key Macro Factors: Slower GDP growth. Tariff risks impacting earnings. Higher political & economic uncertainty.
Opinion
Mag 7’s decline may signal a structural shift rather than a short-term correction. For years, large-cap tech stocks dominated market gains, but rising macro risks and valuation concerns suggest a more volatile future. With tariff uncertainty, slower growth, and tighter liquidity, investors should look beyond Mag 7 and diversify their portfolios.
Core Sell Point
The decline in Mag 7 and the S&P 500 target cut highlight increased market volatility. Investors should prioritize risk management and diversification to navigate an uncertain economic and policy landscape.

Goldman Sachs has revised its 2025 S&P 500 target downward, citing weakness in the Magnificent 7 (Mag 7), economic uncertainty, and policy risks.

1. Magnificent 7: From Dominance to Decline?

Past Performance (2023):

  • Mag 7 contributed to over half of the S&P 500’s 25% annual return, driving market gains.

Current Crisis (March 2025):

  • Mag 7 plunged 14% in three weeks, triggering a broader S&P 500 decline.

  • Some analysts have started calling them the "Maleficent 7."

Key Factors Behind the Decline:

  • Policy Uncertainty: Potential tariff hikes are dampening investor confidence.

  • Economic Slowdown Concerns: Growth forecasts are weakening, adding to investor anxiety.

  • Hedge Fund Unwinding: Heavy long positions in Mag 7 are being liquidated, accelerating the sell-off.

Market Implications:

  • A market heavily reliant on a few large-cap tech stocks is vulnerable to volatility.

  • Investors may need to diversify away from Mag 7 to reduce risk exposure.

2. S&P 500 2025 Target Cut

  • Goldman Sachs now targets 6,200 for year-end 2025, down from 6,500 (-4%).

Reasons for the Revision:

  • Lower P/E Ratio Assumption:

    • Cut from 21.5x to 20.6x amid heightened risk.

  • Reduced EPS Growth Forecast:

    • 2025 EPS growth outlook cut from 9% to 7% (2026 remains at 7%).

Macroeconomic Backdrop:

  • U.S. GDP Growth Slowing: Goldman’s economic team revised growth projections downward.

  • Tariff Increases Expected: Rising tariffs could erode corporate earnings.

  • Higher Uncertainty: Political and economic risks are raising the equity risk premium.

Supporting Data:

  • Despite the cut, the new target still suggests an 11% upside from current levels.

  • Goldman now forecasts 2025 EPS at $262 and 2026 EPS at $280, below consensus estimates.

3. Additional Considerations

Impact of Tariffs:

  • A 5% tariff increase could reduce S&P 500 EPS by 1-2%, assuming firms pass most costs to consumers.

Market Risk Indicators:

  • The Economic Policy Uncertainty Index has surged.

  • The spread between S&P 500 earnings yield and real 10-year Treasury yield has widened.

Conclusion

The decline of Mag 7 and the S&P 500 target cut reflect Goldman Sachs' cautious stance on U.S. equities.
Rising policy risks, slowing growth, and increased volatility signal a more uncertain market environment.
Investors should focus on risk management and portfolio diversification in response to these shifts.

[Compliance Note]

  • All posts by Sellsmart are for informational purposes only. Final investment decisions should be made with careful judgment and at the investor’s own risk.

  • The content of this post may be inaccurate, and any profits or losses resulting from trades are solely the responsibility of the investor.

  • Core16 may hold positions in the stocks mentioned in this post and may buy or sell them at any time.

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