Analysts expect the S&P 500 to report earnings growth for the fourth straight year in CY 2024. The estimated (year-over-year) earnings growth rate for CY 2024 is 9.5%, which is above the 10-year average (annual) earnings growth rate of 8.0% (2014 – 2023).
It is interesting to note that four of the top five contributors to earnings growth for CY 2024 are “Magnificent 7” companies: NVIDIA, Amazon.com, Alphabet, and Meta Platforms. Overall, analysts expect the “Magnificent 7” companies will report earnings growth of 33% in 2024. On the other hand, analysts predict the other 493 companies will report earnings growth of just over 4% for 2024.
At the sector level, eight of the eleven sectors are predicted to report year-over-year earnings growth in CY 2024. Five of these eight sectors are projected to report double-digit growth: Communication Services, Information Technology, Financials, Consumer Discretionary, and Utilities. On the other hand, three sectors are predicted to report a year-over-year decline in earnings. Only one of these sectors is predicted to a report a double-digit decline: Energy.
In terms of revenues, the estimated (year-over-year) revenue growth rate for CY 2024 is 5.1%, which is equal to the trailing 10-year average (annual) revenue growth rate of 5.1% (2014 – 2023). Nine of the eleven sectors are projected to report year-over-year growth in revenues, led by the Information Technology, Health Care, and Communication Services sectors. On the other hand, two sectors are expected to report a year-over-year decline in revenues, led by the Energy sector.
The estimated net profit margin (based on aggregate estimates for revenues and earnings) for the S&P 500 for 2024 is 12.0%, which is above the 10-year average (annual) net profit margin of 10.8%.
Author’s Note: The FactSet Earnings Insight report was published one day early on December 12. The next edition of the report will be published on Friday, December 20.
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This blog post is for informational purposes only. The information contained in this blog post is not legal, tax, or investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.
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Mr. John Butters is Vice President and Senior Earnings Analyst at FactSet. His weekly research report, “Earnings Insight,” provides analysis and commentary on trends in corporate earnings data for the S&P 500 including revisions to estimates, year-over-year growth, performance relative to expectations, and valuations. He is a widely used source for the media and has appeared on CNBC, Fox Business News, and the Business News Network. In addition, he has been cited by numerous print and online publications such as The Wall Street Journal, The Financial Times, The New York Times, MarketWatch, and Yahoo! Finance. Mr. Butters has over 15 years of experience in the financial services industry. Prior to FactSet in January 2011, he worked for more than 10 years at Thomson Reuters (Thomson Financial), most recently as Director of U.S. Earnings Research (2007-2010).
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