Exante, a global broker, has released a new report examining S&P 500 earnings trends for Q1 2026, revealing that earnings growth could reach its highest level since Q4 2021.
The report highlights that the estimated year-on-year earnings growth rate for Q1 stands at 12.6%, a marginal dip from the 12.8% forecast recorded on 31 December. Should this figure hold, it would mark the sixth consecutive quarter of double-digit year-on-year earnings growth for the index.
However, Exante notes that, based on historical patterns during earnings seasons, actual growth could surpass 20%, which would represent the strongest performance since Q4 2021, when the index achieved 32.0%.
Exante’s findings draw on 40 quarters of data, noting that in 37 of those quarters the S&P 500’s actual earnings growth rate exceeded end-of-quarter estimates. The only exceptions were Q1 2020, Q3 2022, and Q4 2022.
Over the past five years, the earnings growth rate has risen by an average of 7.0 percentage points between the close of a quarter and the end of the corresponding earnings season, driven by the frequency and scale of positive earnings surprises. Applying this average to the 13.2% estimate recorded on 31 March would put the actual growth rate at 20.2%.
Of the 20 S&P 500 companies that had reported Q1 results as of 10 April, 80% posted earnings per share above the consensus estimate, with collective earnings exceeding forecasts by 15.7%. Despite these positive surprises, downward revisions to EPS estimates since the quarter’s close have offset the gains, pulling the overall S&P 500 earnings growth rate down by 0.6 percentage points from 13.2% to 12.6%.
For more insights, read the full report here.
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