With about 80% of Q4 2024 S&P 500 earnings reports complete, corporate America has done its part to sustain the optimistic growth narrative that investors have been focused on as they look toward 2025. According to Factset Research, 76% of companies have beaten their earnings expectations with an aggregate positive surprise of 7.3% which exceeds the long-term average.
However, as tariff rhetoric continues to escalate, company guidance has largely been more subdued resulting in lowered growth expectations on the part of investors. The anticipated earnings growth rate for calendar year 2025 has moved from 14.7% at the end of December to 12.7% by February 14th.
As we discussed in our January Insights, expectations to start 2025 appeared too high, so we would view this transition lower as a positive development. However, there are limits to the reductions before investors begin to worry about the true level of achievable growth for the remainder of the year.
February 19, 2025
With about 80% of Q4 2024 S&P 500 earnings reports complete, corporate America has done its part to sustain the optimistic growth narrative that investors have been focused on as they look toward 2025. According to Factset Research, 76% of companies have beaten their earnings expectations with an aggregate positive surprise of 7.3% which exceeds the long-term average.
However, as tariff rhetoric continues to escalate, company guidance has largely been more subdued resulting in lowered growth expectations on the part of investors. The anticipated earnings growth rate for calendar year 2025 has moved from 14.7% at the end of December to 12.7% by February 14th.
As we discussed in our January Insights, expectations to start 2025 appeared too high, so we would view this transition lower as a positive development. However, there are limits to the reductions before investors begin to worry about the true level of achievable growth for the remainder of the year.