Earnings Sentiment (Analyst Upgrades Minus Downgrades Across Markets) Earnings sentiment for the S&P 500 has improved, with several key indicators pointing to robust corporate performance and potential for continued market growth. Image: Goldman Sachs Global Investment Research
Forward EPS YoY % Change vs. S&P 500 Annual Rate of Change Corporate earnings play a key role in shaping market performance. In 2025, the expected U.S. economic slowdown might limit their growth, challenging stock market returns. Image: Real Investment Advice
Earnings Growth – Mag 7 and S&P 500 ex-Mag 7 While the pace of earnings growth for the Magnificent Seven is expected to moderate from the explosive gains of recent years, they are still forecast to outperform the rest of the S&P 500 throughout 2025 and 2026. Image: J.P. Morgan Asset Management
S&P 500 Forward Earnings Estimates The fundamental earnings trajectory for the S&P 500 remains robust, with accelerating growth anticipated through 2026, underpinning a cautiously optimistic market outlook, despite various bearish headlines and market volatility. Image: Real Investment Advice
Valuation – S&P 500 Forward Price-to-Earnings The S&P 500 is trading at 22 times expected earnings over the next year, 35% above its 20-year average. These elevated valuations are partly justified by expectations of strong forward earnings growth. Image: Bloomberg
S&P 500 Earnings Yield Minus U.S. 10-Year Treasury Yield The recent rally has made U.S. equities relatively expensive compared to bonds. Historically, when the risk premium has been at current levels, the S&P 500 has delivered an average 12-month return of only 2.5% over the past three decades. Image: Bloomberg
Earnings Sentiment Current earnings sentiment is on an upward trajectory, with multiple indicators highlighting robust corporate performance and the potential for continued market growth. Image: TS Lombard
S&P 500 Earnings and Estimates As the U.S. economy shows clear signs of slowing, and with persistent trade and policy headwinds alongside elevated equity valuations, S&P 500 earnings estimates may still have further to fall. Image: Real Investment Advice
Cumulative Change in Consensus Earnings Estimates Despite a projected slowdown in earnings growth for the Magnificent 7 in 2025, analysts remain broadly optimistic about their continued market leadership. Image: Goldman Sachs Global Investment Research
Earnings Growth Goldman Sachs anticipates a more diversified earnings landscape for the S&P 500, with the dominance of the Magnificent Seven tech giants moderating as other companies pick up the pace. Image: Goldman Sachs Global Investment Research
Median Excess Return vs. S&P 500 on Day After Earnings Report While positive earnings surprises still led to outperformance in 1Q, the magnitude of that outperformance was smaller than usual for the quarter, due to broader macroeconomic concerns or already high expectations priced into stocks. Image: Goldman Sachs Global Investment Research