Jefferies analysts have highlighted the potential benefits of tariffs, suggesting that they could serve as a valuable opportunity for tech companies like Meta, Microsoft, and Google to reset their financial objectives amidst macroeconomic uncertainties.
Financial Adjustments Amidst Tariffs
The imposition of tariffs and the resulting market volatility offer tech companies a chance to recalibrate their performance goals. Jefferies analysts emphasized that this 'free hall pass' allows companies to revise their guidance to more conservative figures, which could ultimately enhance investor sentiment and improve share performance.
Impact on Tech Giants
Jefferies analysts revised their forecasts for 29 tech companies, including Meta, Microsoft, Google, and Amazon. They notably reduced Meta's stock price target by 17% and slashed its earnings per share for 2025 by 13%. Similarly, Microsoft saw a 5% reduction in its price target, while Google and Amazon had their 2025 EPS estimates adjusted by 2% and 1%, respectively.
Market Response to Tariffs
The introduction of tariffs has not only affected individual companies but has also roiled global markets. President Donald Trump's recent announcement of retaliatory tariffs triggered significant market losses, with the S&P 500, Dow, and Nasdaq composite all experiencing sharp declines. The subsequent impact on Asian markets, such as Japan's Nikkei and Hong Kong's Hang Seng index, further underscores the widespread repercussions of tariff policies.
Industry Response and Economic Outlook
Several businesses, including Target and Best Buy, have indicated their intention to raise prices in response to increased import duties. The escalation of the trade war has raised concerns among economists and market experts, with former Treasury Secretary Larry Summers estimating the potential loss from tariff policies to be as high as $30 trillion.
As tech companies navigate the uncertainties brought about by tariffs, Jefferies analysts anticipate a period of elevated volatility in the second quarter followed by potential stabilization and clarity in the latter half of the year.
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By: sgoel@insider.com (Shubhangi Goel)
Title: How Tariffs Impact Tech Giants: Jefferies Analysts Speak Out
Sourced From: markets.businessinsider.com/news/stocks/tariffs-free-hall-pass-to-reset-big-tech-profit-guidance-2025-4
Published Date: Mon, 07 Apr 2025 05:05:24 +0000
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