Chart of the Day - The best to come: 6% earnings growth in Q1 leading up to 11.4% for FY'2024
Q1 2024 sets the stage for accelerating earnings growth throughout the year.
At the close of Q1 2024, with 96% of S&P 500 companies reporting, 78% have achieved positive earnings surprises, and 61% have surpassed revenue expectations. This has driven the blended year-over-year earnings growth rate to 6.0%, the highest since Q1 2022. This growth is especially notable considering the initial estimate of 3.4% at the end of March, showing robust performance across multiple sectors.
Looking ahead, analysts are optimistic about continued growth. Earnings are projected to increase by 9.3% in Q2 2024, 8.3% in Q3 2024, and an impressive 17.6% in Q4 2024. For the full year 2024, the forecasted earnings growth stands at 11.4%. This positive outlook is underpinned by ongoing innovations and the integration of AI across industries.
Despite the high forward P/E ratio of 20.5, which is above both the 5-year and 10-year averages, the S&P 500 continues to show strong potential for growth, driven by significant positive earnings revisions and sustained performance in key sectors.
As we move further into 2024, the focus on AI and sustained earnings growth will likely remain critical drivers for the S&P 500, promising a dynamic and forward-looking market environment.
Source: FactSet
