S&P 500 Expected to See 7.5% Earnings Growth for 2024 Q4

Recent report indicates S&P 500 earnings are projected to rise by 7.5% in Q4 2024, primarily driven by key sectors such as Medical and Tech. However, earnings estimates have seen downward revisions that could impact investor sentiment.

Date: 09-12-2024

AI Rating: 6

Earnings Overview

According to the recent report, total S&P 500 earnings for the fourth quarter of 2024 are expected to grow by 7.5% compared to the same quarter last year, with revenues also anticipated to increase by 4.7%. This growth outlook highlights a generally positive trend for the index.

Earnings Estimates

However, it is crucial to note that earnings estimates for the period have been revised down from a previous 9.8%. This reduction in the growth rate could weigh on investor confidence, indicating that while growth is still expected, it is not as robust as earlier anticipated.

Sector Performance

The report outlines that Q4 earnings are expected to be higher than last year for 9 out of the 16 Zacks sectors, particularly shining in sectors such as Medical (+16%), Tech (+14.5%), Finance (+10.7%), and Utilities (+9.1%). This broad-based growth in these key sectors may provide a good foundation for investor interest.

Conversely, 7 sectors are predicted to experience declines, notably Energy (-20.7%), Aerospace (-17.9%), and Conglomerates (-14.3%). Such negative projections for these sectors could dampen overall market performance and contribute to volatility.

The Magnificent 7

Particularly noteworthy is the performance expectation for the ‘Magnificent 7’ group of companies, which are projected to see a significant earnings increase of 20.5%. Excluding these companies, the overall index would show merely a 3.6% increase, indicating that while some companies are significantly outperforming, the broader market may lag behind.

Conclusion

In summary, while the outlook for Q4 2024 shows potential for earnings growth, the downgrades in estimates coupled with mixed sector performances suggest a cautious approach for investors. Tracking earnings revisions closely could be essential for forming a strategy moving forward.

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