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S&P 500 forward earnings forecasts climb as profits outlook stays steady
Wall Street has lifted forward 12-month S&P 500 profit estimates to about $373 per share, roughly 32% higher than a year ago, without the usual plunge in EPS forecasts that typically precedes bear markets.
The S&P 500 is seeing an unusual stretch of strength in earnings expectations, with analysts lifting forward profit estimates for the index. According to Yahoo Finance, Wall Street forecasts for next year’s S&P 500 profits have risen to about $373 per share, up roughly 32% from a year ago.
The chart highlights a key break from past cycles: the expected “earnings bust” did not arrive. Kevin Gordon, head of macro research and strategy at Schwab Center for Financial Research, pointed out that earlier periods of stronger forward earnings growth after 1990 were preceded by large drops in EPS estimates, whereas the dip before the current boom was about 6%.
Yahoo Finance also notes that forward earnings fell far more in prior downturns, including about 38% around the global financial crisis and about 22% during the pandemic. During the S&P 500’s 25% bear-market slide from January through October 2022, forward EPS rose about 5%, and forecasts ultimately fell just 6%, helping send the index’s forward price-to-earnings multiple from about 21.5 to 15.3 times.
The article says the earnings growth is broad-based across the index, with all 11 S&P 500 sectors showing positive forward earnings growth. Technology leads at roughly 82% growth, while the Magnificent Seven are growing around 44%, compared with roughly 21% for the equal-weight S&P 500, suggesting the pattern extends beyond megacaps even as they still influence the headline number.
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