Exante, a global brokerage firm, has published a report analyzing earnings trends for the S&P 500 for the first quarter of 2026. The findings indicate that earnings growth could reach its highest level since the end of 2021.
The report estimates a year-on-year earnings growth rate of 12.6% for Q1, slightly down from the 12.8% forecast provided on December 31. If this estimate is accurate, it would mark the sixth consecutive quarter of double-digit growth for the index.
Exante suggests that, based on historical trends during earnings seasons, the actual growth may surpass 20%, reflecting the strongest performance since Q4 2021, when the growth rate was recorded at 32.0%.
The analysis is based on 40 quarters of data, and it reveals that in 37 of those quarters, the actual earnings growth rate of the S&P 500 exceeded the estimates at the end of the quarter. The exceptions were Q1 2020, Q3 2022, and Q4 2022.
Over the past five years, the earnings growth rate has, on average, increased by 7.0 percentage points from the end of a quarter to the closure of the earnings season. This pattern has been fueled by a high frequency of positive earnings surprises. If this average is applied to the 13.2% estimate from March 31, the projected actual growth rate would be 20.2%.
As of April 10, 20 companies within the S&P 500 had reported their Q1 earnings, and 80% surpassed consensus estimates for earnings per share. These companies collectively exceeded forecasts by 15.7%. However, subsequent downward adjustments to EPS estimates have diminished the overall earnings growth rate by 0.6 percentage points, reducing it from 13.2% to 12.6%.
For further insights, access the full report here.
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