Chicago, IL – May 2, 2024 – Zacks Director of Research Sheraz Mian says, " Total earnings for the 310 S&P 500 members that have reported Q1 results are up +5.0% from the same period last year on +4.5% higher revenues."
A Positive Earnings Picture Remains
Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>
Here are the key points:
The picture emerging from the Q1 earnings season continues to be one of steady improvement and resilience, with the earnings growth pace modestly accelerating and estimates for the coming periods starting to increase. On the flip side, positive surprises are tracking below other recent periods, particularly on the revenues side.
Total earnings for the 310 S&P 500 members that have reported Q1 results are up +5.0% from the same period last year on +4.5% higher revenues, with 78.1% beating EPS estimates and 59.4% beating revenue estimates.
As was the case in the preceding two quarters, the Tech sector remains a key growth driver in 2024 Q1. Had it not been for the robust Tech sector earnings growth, total earnings for the rest of the index would be down -2.6% (instead of +4.8% as a whole).
Looking at the calendar year picture, total S&P 500 earnings are expected to grow by +8.6% this year after last year’s modest decline. Excluding the hefty Tech sector contribution, whose 2024 earnings are expected to be up +16.0%, earnings for the rest of the index would be up only +5.9%.
We have consistently flagged signs of improvement in the overall revisions trend in recent weeks, with estimates starting to go modestly up. We are seeing this trend for the current period (2024 Q2) as well as for full-year 2024 estimates.
This new development has roughly coincided with the start of the Q1 earnings season. That said, a number of sectors, including Tech and Retail, had already been enjoying positive estimate revisions for quite some time. At present, half of the 16 Zacks sectors have higher aggregate earnings estimates relative to what was expected at the start of the year.
In recent weeks, we have highlighted the favorable revisions trend for the Energy sector in this space. This week, we will discuss the evolving earnings outlook for the ‘Magnificent 7’ stocks.
Please note that the $438.1 billion the group is currently expected to earn in 2024 is up from $428.2 billion last week.
We all know that the revisions trend for Tesla TSLA has been negative for a while now, while the same for Apple AAPL is also negative, though the magnitude of negative revisions for Apple is far less severe.
The revisions trend for the remaining five members of this group is positive enough to more than offset the Tesla and Apple effects. Of these five, Nvidia NVDA is in a league of its own.
A big part of this year’s earnings growth is expected to come from margins reversing last year’s declines and starting to expand again. The expectation is that aggregate net margins this year get back to the 2022 level, with the Tech sector driving most of the gains.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
