What it measures
Earnings revisions look at how analysts’ forecasts for future company profits change over time. The forward EPS trend for the S&P 500 aggregates these estimates, and upward revisions indicate improving profit outlooks while downward revisions signal weakening expectations.
Recent trend
After falling during the 2022–2023 earnings recession, forward EPS estimates stabilized and moved higher over the past six months as companies delivered better‑than‑expected profits. RBC notes that Wall Street now expects S&P 500 earnings to grow about 11.6 % in 2025 and 12.8 % in 2026, implying roughly $310 in operating earnings. Despite the upward revisions, valuations remain elevated, leaving little room for disappointment.
Six‑month outlook
Looking ahead, modest upward revisions are likely as cost pressures ease and topline growth remains resilient. We expect analysts to nudge 2026 EPS estimates toward the low‑$310s over the next six months, though potential margin compression or slower demand could temper upgrades.
Signal
We assign a Yellow signal. While earnings revisions have turned positive and the forward EPS trend is rising, high valuations and economic uncertainties mean that expectations could be vulnerable to n
egative surprises
