Positive Trend in Earnings Performance
As the Q1 earnings season unfolds, a promising surge in growth is becoming apparent. Total earnings for the 440 S&P 500 members that have reported results show a significant rise of +5.0% from last year, accompanied by a +4.2% increase in revenues. Impressively, 78.0% of these companies have surpassed earnings per share (EPS) estimates, with 60.9% beating revenue projections.
Acceleration in Earnings Outlook
The pace of earnings and revenue growth for these S&P 500 constituents reflects a noteworthy acceleration compared to recent periods. Once the Energy sector and Bristol Myers’s one-time charge are factored in, the +5% earnings growth escalates to a notable +11.9%.
Upward Trajectory Anticipated
Looking forward to 2024 Q2, forecasts predict a solid +9.2% upsurge in S&P 500 earnings compared to the corresponding period in the previous year. Revenue is also expected to climb by +4.5%. The upward trend is evident with estimates rising since the beginning of April, with the current +9.2% growth rate surpassing the +8.7% mark recorded on April 3rd.
Yearly Growth Expectations
For the calendar year, optimism prevails with an anticipated +8.9% growth in total S&P 500 earnings following a slight decline in the previous year. Excluding the dominant Tech sector’s robust performance, which projects a substantial +15.9% growth in 2024 earnings, the rest of the index is set for a commendable +6.3% rise.
We are witnessing a constructive trend in earnings revisions, with estimates gradually on the rise for both the ongoing quarter (2024 Q2) and full-year 2024 predictions.
Sector Wise Analysis
Various sectors, particularly Tech and Retail, have enjoyed positive estimate revisions even before the Q1 earnings season commenced. At present, half of the Zacks sectors boast higher aggregate earnings estimates compared to initial projections at the start of the year.
Special attention has been drawn to the flourishing revisions trend in the Energy sector, with a forthcoming discussion on the evolving earnings outlook for prominent stocks.
Striking Evolution in Earnings Estimates
Noteworthy shifts in earnings estimates particularly in notable stocks such as Nvidia NVDA, reflect a positive trajectory. While certain stocks have encountered negative revisions, the overall momentum in estimates showcases a positive reinforcement, vastly outweighing any detrimental effects.
The comprehensive earnings outlook for the S&P 500 index continues to display promising growth potential, attracting investor attention.