Only a few weeks after publishing the firm’s 2016 outlook for the S&P 500, Deutsche Bank analyst David Bianco released a new report discussing the downside risk that weak oil prices pose to the firm’s EPS estimates for this coming year.

Deutsche Bank had projected $125 S&P 500 earnings for 2016, but Bianco points out that this estimate was based on average 2016 oil prices of $55/bbl. Now that oil has logged yet another leg down following the December OPEC meeting, Bianco says that $55/bbl is unreasonable.

“A 25% rally in oil prices would result in only $40-45/bbl oil,” he explained. “This is still too low for Energy sector profits to be up in 2016.”

Deutsche Bank is…

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