Given concerns in the market about higher oil and gas prices, did analysts lower EPS estimates more than normal for S&P 500 companies for the third quarter?
The answer is no. During the third quarter, analysts increased EPS estimates in aggregate for the quarter. The Q3 bottom-up EPS estimate (which is an aggregation of the median EPS estimates for Q3 for all the companies in the index) increased by 1.4% (to $89.84 from $88.64) from June 30 to September 30.
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 2.2%. During the past ten years, (40 quarters), the average decline in the bottom-up EPS estimate during quarter has been 2.5%. During the past fifteen years, (60 quarters), the average decline in the bottom-up EPS estimate during the quarter has been 3.2%. During the past 20 years (80 quarters), the average decline in the bottom-up EPS estimate during the quarter has been 4.2%.
The third quarter marked the second-straight quarter that the bottom-up EPS estimate has increased during the quarter.
At the sector level, three sectors witnessed an increase in their bottom-up EPS estimate for Q3 2026 from June 30 to September 30, led by the Energy (+18.0%) and Information Technology (+3.5%) sectors. On the other hand, eight sectors recorded a decrease in their bottom-up EPS estimate for Q3 2026 during this period, led by the Materials (-10.2), Consumer Staples (-4.0%), and Health Care (-3.3%) sectors.
It is interesting to note that analysts also increased earnings estimates for 2026 over the past three months. From June 30 through September 30, the CY 2026 bottom-up EPS estimate increased by 6.2% (to $361.66 from $340.49). Seven sectors recorded an increase in their bottom-up EPS estimate for CY 2026 during this period, led by the Communication Services (+21.0%), Consumer Discretionary (+18.1%), and Energy (+17.2%) sectors.
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