Heading into the start of the earnings season, analysts and companies have been more optimistic than normal in their earnings outlooks for the first quarter. As a result, estimated earnings for the S&P 500 for the first quarter are higher today compared to expectations at the start of the quarter. In addition, the index is expected to report double-digit earnings growth for the sixth-straight quarter.
In terms of estimate revisions for companies in the S&P 500, analysts have increased earnings estimates in aggregate for Q1 2026 to date. On a dollar-level basis, total estimated earnings for the first quarter have increased by 0.4% (to $629.3 billion from $627.0 billion) since December 31.
In terms of guidance for the first quarter, more S&P 500 companies are issuing positive EPS guidance than negative EPS guidance for Q1 2026. At this point in time, 110 companies in the index have issued EPS guidance for Q1 2026. Of these companies, 59 have issued positive EPS guidance and 51 have issued negative EPS guidance. The number of S&P 500 companies issuing positive EPS guidance for Q1 2026 is above the 5-year average of 44 and above the 10-year average of 40.
However, it should be noted that most of the increase in earnings expectations for Q1 over the past few months has been concentrated in the Information Technology and Energy sectors. The Information Technology sector has the highest number of companies issuing positive EPS guidance for the quarter (33), while the Energy and Information Technology sectors have recorded the largest (+8.6%) and second-largest (+8.0%) increases in expected dollar-level earnings of all eleven sectors since December 31. Outside of the Information Technology and Energy sectors, the only other sector that has recorded an increase in dollar-level earnings since December 31 is the Financials sector (+0.4%).
Due to the upward revisions to earnings estimates by analysts and the positive EPS guidance issued by companies, the estimated (year-over-year) earnings growth rate for Q1 2026 is higher today relative to the start of the first quarter. As of today, the S&P 500 is expected to report (year-over-year) earnings growth of 13.2%, compared to the estimated (year-over-year) earnings growth rate of 12.8% on December 31.
If 13.2% is the actual growth rate for the quarter, it will mark the sixth consecutive quarter of double-digit (year-over-year) earnings growth for the index.
Nine of the eleven sectors are projected to report year-over-year growth, led by the Information Technology, Materials, and Financials sectors. On the other hand, two sectors are predicted to report a year-over-year decline in earnings, led by the Health Care sector.
In terms of revenues, analysts have also increased their estimates during the quarter as well. As of today, the S&P 500 is expected to report (year-over-year) revenue growth of 9.7%, compared to the expectations for revenue growth of 8.2% on December 31.
If 9.7% is the actual revenue growth rate for the quarter, it will mark the highest revenue growth rate reported by the index since Q3 2022 (11.0%).
All eleven sectors are projected to report year-over-year growth in revenues, led by the Information Technology, Communication Services, and Financials sectors.
For Q2 2026 through Q4 2026, analysts are calling for earnings growth rates of 19.1%, 21.2%, and 19.3%, respectively. For CY 2026, analysts are predicting (year-over-year) earnings growth of 17.4%.
The forward 12-month P/E ratio is 19.8, which is below the 5-year average (19.9) but above the 10-year average (18.9). This P/E ratio is also below the forward P/E ratio of 22.0 recorded at the end of the fourth quarter (December 31).
During the upcoming week, 3 S&P 500 companies are scheduled to report results for the first quarter.
The FactSet Earnings Insight report is being published one day early this week on April 2. The next edition of the report will be published on April 10.
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