S&P 500 CY 2024 Earnings Preview: Analysts Expect Earnings Growth of 9.5%

Analysts expect the S&P 500 to report earnings growth for the fourth straight year in CY 2024. The estimated (year-over-year) earnings growth rate for CY 2024 is 9.5%, which is above the 10-year average (annual) earnings growth rate of 8.0% (2014 - 2023).

It is interesting to note that four of the top five contributors to earnings growth for CY 2024 are "Magnificent 7" companies: NVIDIA, Amazon.com, Alphabet, and Meta Platforms. Overall, analysts expect the "Magnificent 7" companies will report earnings growth of 33% in 2024. On the other hand, analysts predict the other 493 companies will report earnings growth of just over 4% for 2024.

At the sector level, eight of the eleven sectors are predicted to report year-over-year earnings growth in CY 2024. Five of these eight sectors are projected to report double-digit growth: Communication Services, Information Technology, Financials, Consumer Discretionary, and Utilities. On the other hand, three sectors are predicted to report a year-over-year decline in earnings. Only one of these sectors is predicted to a report a double-digit decline: Energy.

In terms of revenues, the estimated (year-over-year) revenue growth rate for CY 2024 is 5.1%, which is equal to the trailing 10-year average (annual) revenue growth rate of 5.1% (2014 - 2023). Nine of the eleven sectors are projected to report year-over-year growth in revenues, led by the Information Technology, Health Care, and Communication Services sectors. On the other hand, two sectors are expected to report a year-over-year decline in revenues, led by the Energy sector.

The estimated net profit margin (based on aggregate estimates for revenues and earnings) for the S&P 500 for 2024 is 12.0%, which is above the 10-year average (annual) net profit margin of 10.8%.

Author's Note: The FactSet Earnings Insight report was published one day early on December 12. The next edition of the report will be published on Friday, December 20.

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