Given concerns in the market about higher oil prices, have analysts lowered EPS estimates more than normal for S&P 500 companies for the fourth quarter?
The answer is no. During the month of October, analysts have increased EPS estimates for S&P 500 companies 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 1.4% (to $94.79 from $93.49) from September 30 to October 29.
In a typical quarter, analysts usually reduce earnings estimates during the first month of a quarter. During the past five years (20 quarters), the average decline in the bottom-up EPS estimate during the first month 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 month of a quarter has been 1.3%. During the past fifteen years, (60 quarters), the average decline in the bottom-up EPS estimate during the first month of a quarter has been 1.7%. During the past 20 years (80 quarters), the average decline in the bottom-up EPS estimate during the first month of a quarter has been 1.9%.
This marks the 3rd consecutive quarter and the 5th time in the past 6 quarters that the bottom-EPS estimate has increased during the first month of the quarter.
At the sector level, five of the eleven sectors witnessed an increase in their bottom-up EPS estimate for Q4 2026 from September 30 to October 29, led by the Energy (+20.3%) sector. On the other hand, five sectors recorded a decrease in their bottom-up EPS estimate for Q4 2026 during this period, led by the Consumer Staples (-4.0%) sector.
Analysts also increased earnings estimates for the full year during the month of October. From September 30 through October 29, the CY 2026 bottom-up EPS estimate increased by 0.6% (to $363.94 from $361.80).
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