Analysts' forecasts present a high bar for S&P 500 companies to hurdle in 2Q for the first time since 2021. Companies posted growth 3x faster than expected last quarter and 7x expectations in the prior quarter, when analysts were forecasting low-single-digit growth. Forecasts for 2Q were raised to 8.5% --much closer to the long-term average index gain of 10%. A heavy burden of growth still falls on the Magnificent Seven stocks, where forecasts imply a 29% year-over-year earnings increase, but former laggards are also expected to participate in gains. The energy sector is likely to post its first year-over-year rise in four quarters.
Analysts are expecting 68% of industry groups may report 2Q increases, the broadest growth at the industry level since 2Q22.