Index earnings expectations for US and Europe
As Q1 earnings season gets under way, below we review the current consensus estimates for the US (S&P 500) and Europe (Stoxx 600).
U.S.
The table below shows the current bottom-up consensus estimates for the S&P 500 for Q1, Q2, and Q3 of this year.
It also shows the percentage change in each quarterly estimate from one month ago, and the expected percent growth in earnings from the year-ago quarter.
Earnings expectations for 2022
With 2021 now in the history books, earnings reporting season for Q4 and the full year is set to begin soon. Below we update the current consensus earnings outlook for Q4 as well as the coming year for the S&P 500. We also drill into expectations for sector earnings growth for this year.
The bottom line, so to speak, is that analysts expect solid but more moderate growth in earnings of about 9%, led by gains in the Industrials and Energy sectors, with Financials and Real Estate the only sectors expected to show declines in earnings this year.
S&P 500 earnings have fully recovered, but with wide differences among sectors
The S&P 500 has reported another strong earnings season for Q4, with 79% of companies beating consensus earnings estimates for the quarter. This would be the third highest such reading in Factset’s data since 2008. The beat rate for top-line sales was similarly high at 77%. Aggregate income for the index is about 4% above year-ago levels, indicating that net income on a quarterly basis has fully recovered pre-COVID levels based on Factset’s data.
The S&P 500 is top-heavy, but so are fundamentals
There has been much discussion about the increasing concentration of the market cap weighted indices in the US, with the S&P 500 now showing some of the highest levels of concentration among the largest constituents in history. The top 20 S&P 500 stocks (4% of the constituents) currently comprise 38.6% of the index weight, while the top five companies alone make up 23.8% of the weight.