Analysts Project S&P 500 to Report Double-Digit Earnings Growth for 2024 and 2025

After reporting (year-over-year) earnings growth of 1% in 2023, what are industry analysts projecting for (year-over-year) earnings growth for the S&P 500 for 2024 and 2025?

Industry analysts in aggregate predict the S&P 500 will report year-over-year earnings growth of 11.3% in 2024 and 14.4% in 2025. If these numbers are the actual earnings growth rates for these years, it will mark the third time in the past 15 years that the S&P 500 has reported two consecutive years of double-digit earnings growth. The last two times the S&P 500 reported two straight years of double-digit earnings growth was in 2017 (11.5%) and 2018 (20.3%) and in 2010 (40.2%) and 2011 (12.8%).

At the sector level, analysts are expecting widespread growth for both years. For 2024, nine of the eleven sectors are predicted to report (year-over-year) earnings growth. Four of these nine sectors are projected to report double-digit growth, led by the Communication Services (21.0%) and Information Technology (18.8%) sectors. For 2025, all eleven sectors are predicted to report (year-over-year) earnings growth. Eight of these eleven sectors are projected to report double-digit growth, led by the Information Technology (19.5%) and Health Care (18.5%) sectors.

It is interesting to note that the current earnings growth rate estimates for both years are above the expectations at the start of the year. On December 31, the estimated earnings growth rates for the S&P 500 for 2024 and 2025 were 11.2% and 12.7%, respectively. Thus, analysts have increased earnings estimates in aggregate for both years over the past six months.

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