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Analyst estimates rise as fewer EPS cuts follow extraordinary Q2
About 86% of S&P 500 companies reported EPS above estimates, and earnings were 26.5% above forecasts, according to FactSet.
After a strong second quarter earnings season helped lift US stocks to new highs, Yahoo Finance highlights a potential tailwind into the fall, driven by rising analyst profit estimates alongside fewer estimate cuts.
Evercore ISI strategist Julian Emanuel pointed to earnings revisions that are moving upward instead of following the usual seasonal pattern of revisions.
For the S&P 500, about 86% of companies have reported EPS above estimates, per FactSet, which is above the five year average of 78% and the 10 year average of 76%. If the 86% figure holds for the quarter, it would be the highest share of positive EPS surprises since the second quarter of 2021, when 87% beat forecasts.
Across the quarter, companies are reporting earnings 26.5% above estimates, also above historical averages cited by FactSet. Yahoo Finance adds that the S&P 500 second quarter earnings growth rate stands at 52%, with Goldman Sachs describing the quarter as “stellar fundamentals” even after adjustments, while noting the bull case depends on oil prices staying below $100 a barrel and the Fed avoiding a new rate hiking cycle led by Chairman Kevin Warsh.
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