S&P 500 Earnings Outlook — 3Q 2025
The S&P 500 shows resilience heading into 3Q 2025, with reasonable earnings growth expectations despite a challenging macroeconomic backdrop. Below are the main takeaways for the upcoming earnings season:
Earnings Growth
- Earnings (EPS) are projected to grow 7.9% YoY in 3Q 2025. If confirmed, this would mark the ninth consecutive quarter of growth for the S&P 500. As of June 30, the growth estimate stood at 7.3%.
- Six sectors have seen upward revisions to estimates, contributing to stronger earnings expectations.
Sector Growth
- Eight of the eleven sectors are projected to post annual growth, led by Information Technology, Utilities, Materials, and Financials.
- Three sectors are expected to report annual declines, mainly Energy and Consumer Staples.
Revenues
- Revenues are expected to grow 6.3% YoY, compared to the 4.8% projection as of June 30.
- If confirmed:
o This would be the second-largest revenue growth since 3Q 2022 (11.0%), only behind the previous quarter.
o It would mark the 20th consecutive quarter of revenue growth for the index.
Valuation
- The S&P 500 forward 12-month P/E multiple stands at ~22.5x, above the 5-year average (19.9x) and the 10-year average (18.6x).
- This suggests that while earnings growth continues, valuations remain tight with much optimism already priced in.
Key data points for the quarter:
☑ EPS growth estimate +7.9% YoY in 3Q 2025 (vs. 7.3% as of June 30)
☑ Six sectors with upward revisions
☑ 8 of 11 sectors projected to grow
☑ Revenues +6.3% YoY (vs. 4.8% as of June 30)
☑ 20th consecutive quarter of revenue growth
☑ Forward 12-month P/E ~22.5x (vs. 19.9x 5-year avg. and 18.6x 10-year avg.)
Corporate performance remains resilient, with earnings growth expectations of 10.8% in 2025 and 13.8% in 2026 — outlooks that investors will closely monitor in a context of valuations above historical averages.
Source: FactSet
