Daily Spotlight: Earnings Season Starts This Week

Summary

The 4Q25 EPS season gets under way this week, launched, as usual, by earnings reports from big banks. After that, the floodgates open with Consumer, Healthcare, and Industrial companies all releasing results. IT and Energy companies generally report later in the period, and then the retailers wrap things up by mid-February. According to the consensus (blended estimates from sources such as S&P, Bloomberg, LSEG I/B/E/S, and S&P), S&P 500 earnings from continuing operations for 4Q25 are expected to grow 9%-10% year over year. Given that earnings typically exceed expectations by several percentage points, the “unofficial” forecast is for low-double-digit EPS from 4Q24 levels. This follows 15% growth in 3Q EPS and 13% growth in 2Q EPS, according to LSEG I/B/E/S. The all-important IT sector is expected to set the pace for earnings growth, advancing 27%. Other leading sectors include Materials, Financials, and Communication Services. On the downside, earnings from the Consumer Discretionary sector are expected to decline 3%, while Industrials earnings likely tick lower by 2%. Drilling down, revenue is expected to increase 7% year over year, led by IT’s 18% forecast increase. The balance of earnings growth will come from margin improvement and share buybacks. For 2025, our full-year S&P 500 earnings estimate is $270, implying high-single-digit growth from 2024. We look for continued growth in EPS to $300 in 2026 and $