Analysts Increased EPS Estimates for S&P 500 Companies for 2nd Straight Quarter

Given concerns in the market about inflation and tariffs, did analysts lower EPS estimates more than normal for S&P 500 companies for the fourth quarter? The answer is no. During the fourth quarter, analysts increased EPS estimates in aggregate for the quarter. The Q4 bottom-up EPS estimate (which is an aggregation of the median EPS estimates for Q4 for all the companies in the index) increased by 0.5% (to $70.50 from $70.16) from September 30 to December 31.

In a typical quarter, analysts usually reduce earnings estimates during the quarter. During the past five years (20 quarters), the average decline in the bottom-up EPS estimate during the quarter has been 1.6%. During the past ten years, (40 quarters), the average decline in the bottom-up EPS estimate during quarter has been 3.1%. During the past fifteen years, (60 quarters), the average decline in the bottom-up EPS estimate during the quarter has been 3.3%. During the past 20 years (80 quarters), the average decline in the bottom-up EPS estimate during the quarter has been 4.3%.

This quarter marks the 2^nd straight quarter in which analysts have increased EPS estimates in aggregate during the quarter.

At the sector level, only three of the eleven sectors witnessed an increase in their bottom-up EPS estimate for Q4 2025 from September 30 to December 31: Information Technology (+6.1%), Financials (+1.2%), and Energy (+0.3%). On the other hand, eight sectors recorded a decrease in their bottom-up EPS estimate for Q4 2025 during this period, led by the Utilities (-6.2%), Health Care (-4.0%), and Consumer Staples (-3.8%) sectors.

Analysts also increased earnings estimates for 2026 over the past three months. From September 30 through December 31, the CY 2026 bottom-up EPS estimate increased by 2.5% (to $311.30 from $303.79). At the sector level, five sectors witnessed an increase in their bottom-up EPS estimate for CY 2026 from September 30 to December 31, led by the Information Technology (+9.5%) sector. On the other hand, six sectors recorded a decrease in their bottom-up EPS estimate for CY 2026 during this period, led by the Energy (-5.9%) sector.

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