Strong Earnings Outlook Ahead for S&P 500 Companies

Optimistic earnings predictions set the tone for Q4 reporting. Investors are keenly watching key stocks like Vertiv, Goldman Sachs, and Amazon for potential price movements.

Date: 15-01-2025

AI Rating: 7

Overview of Q4 Earnings Trends: The report highlights an optimistic earnings season approaching for the fourth-quarter 2024, specifically for the S&P 500 companies. Total S&P 500 earnings are projected to surge by 7.4% compared to the previous year, driven by a 4.8% increase in revenues. The report suggests that the estimates have been steadily increasing and indicates a lower frequency of estimate cuts in recent quarters.

Earnings Per Share (EPS): Several companies are noted for their positive earnings estimates leading into this reporting cycle. Notably, Vertiv Holdings Co (VRT) is expected to report a remarkable growth of 50% in EPS. Goldman Sachs (GS) anticipates a 45.8% increase in earnings, while ResMed (RMD) is estimated to have an EPS growth of 21.8%. Ralph Lauren (RL) and Amazon (AMZN) also showcase solid earnings expectations of 7.4% and 51.49%, respectively. Each of these companies has a positive Earnings ESP, bolstering investor expectations.

Revenue Growth: Alongside improving EPS projections, revenue growth is a pivotal factor in shaping stock performance. Vertiv Holdings is forecasted to have a 15.2% increase in revenues, while Goldman Sachs is projected for 7.8% growth. ResMed expects revenues to grow by 8.5%, Ralph Lauren by 4.37%, and Amazon is anticipated to achieve double-digit revenue growth. These projections suggest a favorable future for companies reporting this quarter.

Investment Sentiment: The positive trends in earnings and revenues are likely to instill confidence in investors, potentially propelling the share prices of the highlighted stocks. Particularly, stocks with high expectations, such as Amazon, which demonstrates a significant earnings surprise history of 25.85%, and Vertiv with a 10.13% average surprise, can anticipate upward momentum post-earnings announcements.

Stocks: VRT GS RMD RL AMZN