Analysts Made Largest Increases to Quarterly EPS Estimates for S&P 500 Companies Since 2021

Given concerns in the market about inflation, did analysts lower EPS estimates more than normal for S&P 500 companies for the second quarter? The answer is no. During the second quarter, analysts increased EPS estimates in aggregate for the quarter. The Q2 bottom-up EPS estimate (which is an aggregation of the median EPS estimates for Q2 for all the companies in the index) increased by 3.4% (to $81.54 from $78.84) from March 31 to June 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 2.0%. During the past ten years, (40 quarters), the average decline in the bottom-up EPS estimate during quarter has been 2.7%. 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 4.2%.

In fact, this quarter marked the largest increase in the bottom-up EPS estimate during a quarter since Q2 2021 (+7.7%).

At the sector level, six sectors witnessed an increase in their bottom-up EPS estimate for Q2 2026 from March 31 to June 30, led by the Energy (+61.5%) and Information Technology (+8.7%) sectors. On the other hand, five sectors recorded a decrease in their bottom-up EPS estimate for Q2 2026 during this period, led by the Health Care (-15.3) sector.

It is interesting to note that analysts also increased earnings estimates for 2026 over the past three months. From March 31 through June 30, the CY 2026 bottom-up EPS estimate increased by 6.3% (to $340.52 from $320.39). At the sector level, nine sectors witnessed an increase in their bottom-up EPS estimate for CY 2026 from March 31 to June 30, led by the Energy (+41.2%), Communication Services (+12.5%), Information Technology (+9.1%), and Materials (+8.2%) sectors. On the other hand, two sectors recorded a decrease in their bottom-up EPS estimate for CY 2026 during this period: Health Care (-3.4%) and Consumer Staples (-0.7%) sectors. 

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