Wall Street’s Profit Outlooks Haven’t Budged as World Changes

The financial world is moving fast, as the Federal Reserve prepares to start cutting interest rates and stock indexes are at or near all-time highs.

But one thing hasn’t changed with the times: Wall Street’s expectations for corporate profits.

Analysts project that companies in the S&P 500 Index will earn around $247 per share in 2024, according to data compiled by Bloomberg Intelligence. That’s basically the same level they were at on May 5. In that time the index has risen 14% as the market overcame fears about a banking crisis, rising inflation and the possibility of an imminent recession.

Yet, Wall Street’s earnings estimates for companies in the broad equities benchmark next year have barely moved, drifting between $243 and $248 a share.

“In this disconnect between a rapid stock rally and an unchanged view on per-share earnings in the S&P 500, something has to give,” said Matt Maley, chief market strategist at Miller Tabak + Co. “Just because interest rates stopped going up, it doesn’t mean that stocks can keep rallying while profit estimates remain unchanged.”

Corporate Profit Outlooks Unchanged