News Analyst
Wall Street analysts are partaking once again in a longstanding holiday tradition: lowering their projections for how much profit they expect America’s biggest companies to reap during the coming calendar year.
As of Nov. 15, Wall Street analysts were anticipating that members of the S&P 500 would generate profits of $274.96 per share in 2025, according to data from FactSet. That is lower than the $279.68 they expected in June, and the $276.66 estimate from the end of September.
That profit forecasts for the coming year are declining isn’t unusual in and of itself. Downward revisions to the coming year’s profit outlook are par for the course during the fourth quarter, although this year’s declines have occurred at a slightly faster pace than usual, according to FactSet’s John Butters.
Calendar-year 2025 forecasts have fallen 0.6% since the start of the fourth quarter, which is on par with the average decline for the entire fourth quarter over the past 15 years, according to FactSet’s Butters. But it is slightly faster than the average pace from the past five years. Again, these prior-year numbers reflect changes over the course of the entire fourth quarter.
Usually, investors shrug off these revisions, preferring to wait until companies report their actual results before reacting.
But with the S&P 500 currently trading at a historically rich 22 times forward earnings, further declines could leave investors demoralized by dashing hopes for double-digit earnings growth.
“The stakes are higher because valuations are higher,” said James St. Aubin, chief investment officer at Ocean Park Asset Management.
