Analysts Increasing EPS Estimates Slightly for S&P 500 Companies for Q3

Given concerns in the market about inflation and tariffs, have analysts lowered EPS estimates more than normal for S&P 500 companies for the third quarter?

The answer is no. During the months of July and August, analysts increased EPS estimates slightly for the third quarter. The Q3 bottom-up EPS estimate (which is an aggregation of the median EPS estimates for Q3 for all the companies in the index) increased by 0.5% (to $67.66 from $67.32) from June 30 to August 28.

In a typical quarter, analysts usually reduce earnings estimates during the first two months of a quarter. During the past five years (20 quarters), the average decline in the bottom-up EPS estimate during the first two months of a quarter has been 1.0%. During the past ten years, (40 quarters), the average decline in the bottom-up EPS estimate during the first two months of a quarter has been 2.5%. During the past fifteen years, (60 quarters), the average decline in the bottom-up EPS estimate during the first two months of a quarter has been 2.6%. During the past 20 years (80 quarters), the average decline in the bottom-up EPS estimate during the first two months of a quarter has been 3.2%.

The third quarter marks the first time analysts have increased EPS estimates in aggregate during the first two months of a quarter since Q2 2024 (+0.3%).

At the sector level, five of the eleven sectors witnessed an increase in their bottom-up EPS estimate for Q3 2025 from June 30 to August 28, led by the Information Technology (+4.4%), Energy (+4.0%), and Communication Services (+2.6%) sectors. On the other hand, five sectors recorded a decrease in their bottom-up EPS estimate for Q3 2025 during this period, led by the Health Care (-7.2%) sector. One sector (Utilities) recorded no change (0%) in its bottom-up EPS estimate for Q3 2025 during this period.

Analysts also increased earnings estimates for 2025 during the past two months. From June 30 through August 28, the CY 2025 bottom-up EPS estimate increased by 1.6% (to $268.48 from $264.15).

At the sector level, seven sectors witnessed an increase in their bottom-up EPS estimate for CY 2025 from June 30 to August 28, led by the Communication Services (+4.0%), Financials (+3.3%), and Consumer Discretionary (+3.0%) sectors. On the other hand, three sectors recorded a decrease in their bottom-up EPS estimate for CY 2025 during this period, led by the Health Care (-2.1%) sector. One sector (Real Estate) recorded no change (0%) in its bottom-up EPS estimate for CY 2025 during this period.

Analysts also increased earnings estimates for 2026 during the past two months. From June 30 through August 28, the CY 2026 bottom-up EPS estimate increased by 1.2% (to $303.88 from $300.15).

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