Earnings Scoreboard - Time to re-calibrate

 

Horacio Coutino, multi-asset strategist

Renée Friedman, Global Head of Research

“When it comes to the spread between cheap and expensive, I'm not using the bubble word, okay? ...It's the 77th percentile. It's wider than on average, maybe making it a little more attractive if you can stick with it. That is a big if... but I don't use the word bubble for 77th percentile. I use it for blowing through. So five years ago, I was saying it's a bubble. Now I'm just saying this is a little bit of an odd market.”

— Clifford Asness, Co-founder of AQR, at Odd Lots, on 13th November, 2025. Who’s scoring highest and why

During the week of 10th November, 10 S&P 500 companies (including 2 Dow Jones Industrial Average components, Cisco and Disney) reported earnings. Despite companies beating estimates, market reaction was driven by the end of the US government shutdown and the prospect of a deceleration in monetary easing due to data volatility and hawkish Fed speak.

As of 14th November, 92.7% of the 456 S&P 500 companies that have reported so far beat earnings expectations, while 77.6% surpassed revenue forecasts. According to FactSet, the blended Q3 earnings growth rate stands at 13.1% - equal to last week’s 13.1% and higher than the 8.0% projected at the end of thequarter on 30th September. If it continues, it would mark the fourth consecutive quarter of double-digit growth, and the ninth consecutive quarter of positive earnings growth for the index. The S&P 500 last saw four straight quarters of double-digit earnings growth throughout 2021.

The S&P 500 surprise factor is currently at 7.0%, lower than the average of 7.3% seen over the past four quarters and below the five-year average of 8.4%. Within sectors, Industrials leads with a 16.1% positive earnings surprise, while Communication Services has fallen short of estimates by 9.5%. Since the end of Q3, Financials has experienced the most significant improvement in earnings growth among all 11 sectors, shifting from a projected increase of 11.6% as of 30th September, to an increase of 23.5% today.

Communication Services is now the most significant detractor to the increase in the index’s earnings growth rate due to negative earnings surprises and downward revisions to earnings estimates. The sector is now projected to have a decrease in earnings of 7.8%, whereas on 30th September, it showed a projected increase of 3.0%.

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