With the fourth quarter finished, how much did analysts lower 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) decreased by 2.7% (to $61.88 from $63.60) from September 30 to December 31. This percentage is smaller than the 5-year average of 3.4%.
At the sector level, nine of the eleven sectors witnessed a decrease in their bottom-up EPS estimate for Q4 2024 from September 30 to December 31, led by the Energy (-14.1%) and Materials (-12.5%) sectors. On the other hand, the Communication Services (+4.1%) sector recorded the largest increase in its bottom-up EPS estimate for Q4 2024 of all eleven sectors during this period.
Analysts also lowered EPS estimates for CY 2025 during this period. The CY 2025 bottom-up EPS estimate declined by 0.9% (to $274.07 from $276.67) from September 30 to December 31.
It is interesting to note that while the Q4 EPS estimate declined by 2.7% during the quarter, the price of the index increased by 2.1% (to 5,881.63 from 5,762.48) during this period.
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