Earnings season is upon us for Q4 2023 and so far just north 80% of companies in the S&P 500 have already reported. According to FactSet, 75% of the companies that reported came in above estimates on the street which indicates a beat (better than expected). However, this doesn’t mean the S&P 500 is expensive when looking forward.
The 5-Year Average
To go further, the 5-year average for companies in the S&P 500 that beat a quarterly earnings report is 77%. The good news is that after all the companies in the S&P 500 have reported (remaining 20%), it’s likely that the market will, at the very least, meet the 77% figure.
As far as earnings beats above estimates are concerned, on average the companies that reported a beat were 3.9% above estimates, the 5-year average for that is 8.5%. This particular figure will likely stay below the 5-year average in this particular earnings season but the gap to close in the second half of 2024.
Tracking Earnings Season
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