The Financials sector will be a focus for the market during the upcoming week, as just over 50% of the S&P 500 companies that are scheduled to report earnings for the second quarter over this period are part of this sector, including American Express, Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, Travelers Companies, and Wells Fargo. The Financials sector is predicted to report the fifth-highest year-over-year earnings growth rate of all eleven sectors for the second quarter at 2.4%.
At the industry level, four of the five industries in the sector are expected to report year-over-year earnings growth: Consumer Finance, Insurance, Capital Markets, Banks, and Financial Services.
The Consumer Finance industry is expected to report the highest earnings growth rate in the sector at 23%, led by Capital One Financial ($3.97 vs. $3.14).
The Insurance industry is expected to report the second-highest earnings growth rate in the sector at 13%. Within the Insurance industry, two sub-industries are projected to report year-over-year earnings growth: Property & Casualty Insurance (26%) and Insurance Brokers (14%). On the other hand, the other two sub-industries are projected to report a year-over-year decline in earnings: Reinsurance (-13%) and Life & Health Insurance (-5%).
Stewart Johnson, Associate Director for Deep Sector Content, highlighted key themes to watch for the Insurance industry during this earnings season:
Insurance earnings in 2Q25 are likely be impacted by several macro factors: tariffs, equity markets, and technology. Tariffs imposed on US trading partners will cause downward pressures on P&C earnings as the price of computer chips, car parts and lumber, for example, start to increase. The higher price of these goods will be reflected in companies’ claims costs, such as repairing cars and rebuilding homes. These higher claims costs will push up benefit ratios and pressure earnings. If the cost increases are more than P&C companies expected for policies written before tariffs, earnings outlooks may be lowered. However, P&C companies should see an offset to tariff pressure from rising equity markets, which would provide a tailwind to investment income. Technology is the final macro factor and is expected to have a favorable impact on life and P&C companies as prior investments in AI begin to automate manual tasks, such as generating policyholder communication and analyzing loss trends.
For more commentary and analysis on the insurance industry, please see Stewart’s articles on the FactSet Insight blog and podcast.
The Capital Markets industry is expected to report the third-highest earnings growth rate in the sector at 11%. Within the Capital Markets industry, all three sub-industries are projected to report year-over-year earnings growth: Financial Exchanges & Data (15%), Investment Banking & Brokerage (14%), and Asset Management & Custody Banks (5%).
The Financial Services industry is expected to report the fourth-highest earnings growth rate in the sector at 6%. Within this industry, two of the three sub-industries are projected to report year-over-year earnings growth: Diversified Financial Services (13%) and Transaction & Payment Processing Services (13%). The Multi-Sector Holdings (-5%) sub-industry is the only sub-industry in the Financial Services industry expected to a report a year-over-year decline in earnings.
On the other hand, the Banks industry is the only industry in the Financials sector expected to report a year-over-year decline in earnings at -11%. Within the Banks industry, the Diversified Banks industry is projected to report a year-over-year decline in earnings of -13%, while the Regional Banks industry is predicted to report year-over-year earnings growth of 18%.
At the company level, JPMorgan Chase ($4.48 vs. $6.12) is expected to the be the largest contributor the expected earnings decline for the Banks industry and is also expected to be the largest detractor to expected earnings growth for the entire Financials sector. The company is facing a more difficult comparison to year-ago (GAAP) EPS that included a $7.9 billion gain related to Visa shares. If JPMorgan Chase were excluded, the estimated earnings growth rate for the Financials sector would improve to 9.3% from 2.4%.
Looking ahead, analysts are predicting earnings growth rates for the Financials sector of 8.2%, 4.3%, 14.2%, and 14.3% for Q3 2025 through Q2 2026.
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.