As we wrap up the first quarter earnings season, here are the key insights that highlight the current state of the market and future projections:
Key Insights:
- Earnings Growth: Overall index growth at 8.0%, surpassing the January expected growth rate of 7.2%.
- Revenue Growth: Revenue growth is at 3.8%, slightly lower than the January estimate of 4.1%, with Utilities and Materials as the main drag.
- Financials: Outperformed expectations even after last year’s Silicon Valley Bank collapse.
- Health Care: Notable laggard this quarter.
- 2025 Earnings Estimates: Climbing higher, now at $278.87, indicating a potential 14% growth rate next year after an expected 11% growth this year.
- S&P 500 Projection: Applying today’s multiple to the 2025 EPS figure suggests that +6,000 on the S&P 500 is achievable.
- Magnificent 7: Expected to see a broadening of earnings growth across more sectors in the year’s second half and into 2025.
- Inflation Mentions: The lowest number of S&P 500 companies citing “inflation” on earnings calls since Q2 2021, marking the seventh consecutive quarter of decline, aligning with the year-over-year CPI falling to the 3.1% to 3.5% range.
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