Q4 2024 quarterly earnings season and 2025 Perspectives. 

Expectations for the S&P 500 in 2024 and 2025 reflect strong growth, with significant gains projected across multiple sectors. 

S&P 500 Outlook for Q4 2024 

As is customary, JP Morgan will kick off the corporate earnings season in mid-January. However, it is notable that estimated earnings for the S&P 500 in the fourth quarter remain below initial expectations. Despite this decline, the index could still achieve its highest year-over-year (YoY) earnings growth rate in three years, currently estimated at 11.9%. This growth would bring the full-year 2024 earnings increase to 9.4% YoY. 

If confirmed, this figure would represent the strongest YoY earnings growth since Q4 2021. Additionally, seven out of the eleven sectors in the index are projected to report YoY growth, with Finance, Communication Services, Technology, Consumer Discretionary, Utilities, and Health Care leading the way. Conversely, four sectors are expected to see a YoY decline in earnings, with Energy being the only one forecasted to post a double-digit drop. 

What About 2025? 

Looking ahead, analysts anticipate robust earnings growth for the S&P 500 in 2025, projecting nearly 15% YoY growth, well above the 10-year historical average of 8%. Interestingly, companies outside the “Magnificent 7” group (Google, Amazon, Microsoft, Apple, Tesla, Meta, and Nvidia) are expected to show significant improvement, with earnings growth estimated at 13% for 2025. 

Key Takeaways 

The evolution of the Q4 earnings season and the start of Q1 2025 will be crucial. Investors have displayed considerable optimism in recent months, betting on the persistence of a favorable environment for the corporate sector. 

Expected annual earnings growth for the S&P 500 in Q4 2024 

Source: Facset – Earnings Insight