Citigroup warns of slowing global profit growth in 2027

Citigroup has issued a warning to equity investors regarding a projected slowdown in global corporate profit growth for 2027. While corporate earnings are expected to continue growing, the rate of growth is forecasted to drop significantly from a consensus of approximately 35 percent in 2026 to just 16 percent in 2027.

Analysts at the US bank note that this 20-percentage-point deceleration typically signals sideways market movement based on historical regressions. A significant concern highlighted is the unprecedented level of market dependency on the technology sector, which is expected to account for roughly 70 percent of the total profit increase in 2027.

Beata Manthey, Head of European Equity Strategy at Citi, noted that while earnings expectations for 2026 have risen due to strength in technology and energy, the high bar set for 2026 makes the 2027 outlook particularly striking. Historically, during periods of decelerating growth, sectors such as quality, value, healthcare, and energy have performed well.