Winter 2025 Snapshot of Expected Future S&P 500 Earnings
Every three months, we take a snapshot of the expectations for future earnings in the S&P 500 (Index: SPX) at approximately the midpoint of the current quarter, shortly after most U.S. firms have announced their previous quarter’s earnings.
The latest snapshot is a little early, but still 90 days since the Fall 2024 snapshot. During this time, remarkably little changed in the outlook for the collective earnings of the companies that make up the S&P 500 index. That relative lack of change is a new development that’s taken place over the past six months.
That’s remarkable because it runs counter to the pattern we typically see in how the outlook for earnings changes with time. That pattern is one in which the expectations for future earnings tend to erode with each later snapshot.
To be sure, that pattern holds in the Winter 2025 snapshot but the amount of erosion is tiny. Looking at the S&P 500′s anticipated earnings per share for the end of the fourth quarter of 2025, we find those expectations dipped by $1.49 per share. That’s a decline of just 0.6%.
The following chart, covering how earnings expectations have changed from the end of 2021 through 11 February 2025 illustrates both the typical pattern and the relative lack of change in those expectations since 13 August 2024:
The current projection for the S&P 500′s earnings per share through the end of 2025 is $249.13, which would represent 18.2% year-over-year earnings growth over December 2024′s level of $210.81. Given the typical pattern for how earnings projections develop over time, that figure represents the likely ceiling for potential earnings growth during 2025.
The Winter 2025 snapshot also includes the first projection of the index’ expected earnings per share through the end of 2026. The first estimate of what those earnings will be is $289.64 per share.
Reference
Silverblatt, Howard. Standard & Poor. S&P 500 Earnings and Estimates. [Excel Spreadsheet]. 13 November 2024. Accessed 17 February 2025.
Image Credit: Microsoft Copilot Designer. Prompt: “A crystal ball with the word ‘SP 500′ written inside it”. And ‘Earnings’ written above it, which we added.
Source: https://politicalcalculations.blogspot.com/2025/02/winter-2025-snapshot-of-expected-future.html
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