S&P 500 Earnings Yield Are the Highest Since Sept ’24
Brian Gilmartin | Mar 17, 2025 01:15AM ET
The S&P 500 earnings yield closed last week at 4.79%, only exceeded by the 4.82% print for the week ended September 6 ’24, and – prior to that – the 4.90% prints in early May ’24.
It was January ’24 when we saw the last +5% S&P 500 earnings yield.
Q4 ’24 S&P 500 earnings strength is really remarkable: part of this could have been caused by the surge in imports to beat the “tariff tiff” to be implemented by President Trump, once US companies knew the results of the Presidential election in November ’24.
Q4 ’24 S&P 500 earnings growth ended Friday at +17.1% (estimated) up from the low print of +9.5% on January 10 ’25.
Readers have been shown this table before but here’s the progression of Q4 ’24 S&P 500 EPS and revenue (estimated growth rates), and then 2025’s estimated EPS and revenue growth rates by quarter as well.
Estimate source: LSEG
2025 EPS estimated growth rates still look pretty normal at +7%, +10%, +12.6% and +11% for each quarter of 2025.
Those growth rates will change for sure, but it’s relatively high base to start from for EPS growth.
Conclusion:
I’d love to say the rise in the S&P 500 earnings yield is a bottom for stocks, but it’s not the greatest market-timing indicator. WE (as investors) are certainly looking at a cheaper S&P 500 than even just a few weeks ago, and that’s appreciated.
The 8% – 10% drop in the S&P 500 in Q1 ’25 has everybody’s attention that follows S&P 500 earnings, but so far, everything appears – at least on the surface – to be normal in terms of S&P 500 EPS revisions, particularly for 2025.
Another post is forthcoming this weekend that talks about longer-term S&P 500 EPS trends (growth rates) and a look at some sectors.
Hopefully readers will find it somewhat interesting.
Disclaimer: None of this is advice or a recommendation, but only an opinion. Past performance is no guarantee of future results. Investing can and does involve the loss of principal even for short periods of time. All revenue and EPs data above is sourced from LSEG. None of the above information may be updated, and if updated, may not be done so in a timely fashion.
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