Earnings Growth Expected Across S&P 500 in 2025
Chicago, IL – January 9, 2025 – According to Sheraz Mian, Director of Research at Zacks, the current earnings and revenue revisions show improvement compared to this time last year.
Positive Outlook for Broad-Based Growth
This excerpt is from this week’s Earnings Trends report. Access the full report for detailed historical data and estimates by clicking here>>>
Key Insights:
- For Q4 2024, total S&P 500 earnings are projected to rise by +7.4% compared to the same quarter last year, alongside a +4.8% increase in revenue.
- When excluding the Energy sector’s impact, earnings growth improves to +9.6%. Conversely, without the significant contribution from Tech, growth drops to +3.8%.
- Although estimates have decreased since the beginning of the quarter, the extent of the downward revisions is favorable compared to the same period last year.
- Every one of the 16 Zacks sectors is expected to report positive earnings growth in 2025, with nine projected to achieve double-digit growth. Sectors leading this trend include Aerospace (+60.6%), Consumer Discretionary (+26.4%), Medical (+22.8%), Tech (+16.9%), and others.
Tech Sector Powers Earnings Growth
The Tech sector has been a key driver of growth recently, and this momentum is expected to continue into Q4 2024 and beyond. For this quarter, Tech earnings are anticipated to increase by +14.9%, bolstered by a +10.4% rise in revenue. This marks the sixth consecutive quarter of double-digit earnings growth.
This follows an impressive growth of +22.6% in earnings with +11% higher revenues in Q3 2024. The Tech sector’s positive trajectory is likely to persist, supported by ongoing revisions that point to better earnings outlooks.
Take, for example, Nvidia (NVDA) and Meta Platforms (META). The consensus earnings estimate for Nvidia has climbed to 84 cents from 78 cents over the past two months. Similarly, Meta’s estimate has risen by +7.1% to $6.76 during the same period.
Overall Earnings Landscape
Looking ahead, analysts expect double-digit earnings growth for the next two years. More sectors are poised to experience substantial growth compared to recent years.
In 2025, Tech sector earnings are projected to increase by +16.9%, following a +20.0% rise in 2024. Excluding the Tech contributions, S&P 500 earnings still expect to rise by +12.3% in 2025, with nine sectors forecasted to achieve double-digit earnings growth.
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