Analysts Increasing EPS Estimates Slightly for S&P 500 Companies for Q4

Given concerns in the market about inflation and tariffs, have analysts lowered EPS estimates more than normal for S&P 500 companies for the fourth quarter?

The answer is no. During the months of October and November, analysts increased EPS estimates slightly for the fourth 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 0.3% (to $70.34 from $70.16) from September 30 to November 30.

In a typical quarter, analysts usually reduce earnings estimates during the first two months of a quarter. During the past five years (20 quarters), the average decline in the bottom-up EPS estimate during the first two months of a quarter has been 1.1%. During the past ten years, (40 quarters), the average decline in the bottom-up EPS estimate during the first two months of a quarter has been 2.4%. During the past fifteen years, (60 quarters), the average decline in the bottom-up EPS estimate during the first two months of a quarter has been 2.6%. During the past 20 years (80 quarters), the average decline in the bottom-up EPS estimate during the first two months of a quarter has been 3.2%.

The fourth quarter marks the second-straight quarter in which analysts have increased EPS estimates in aggregate during the first two months of a 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 November 30: Information Technology (+4.5%), Financials (+1.3%), and Energy (+0.5%). On the other hand, eight sectors recorded a decrease in their bottom-up EPS estimate for Q4 2025 during this period, led by the Consumer Staples (-4.3%), Utilities (-4.1%), and Health Care (-3.9%) sectors.

Analysts also increased earnings estimates for 2026 during the past two months. From September 30 through November 30, the CY 2026 bottom-up EPS estimate increased by 1.8% (to $309.16 from $303.78).

At the sector level, six sectors witnessed an increase in their bottom-up EPS estimate for CY 2026 from September 30 to November 30, led by the Information Technology (+5.8%), Financials (+1.9%), and Materials (+1.8%) sectors. On the other hand, four sectors recorded a decrease in their bottom-up EPS estimate for CY 2026 during this period, led by the Energy (-3.3%) sector. One sector (Health Care) recorded no change (0%) in its bottom-up EPS estimate for CY 2026 during this period.

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