FactSet’s fourth-quarter outlook puts companies beyond the S&P 500’s Magnificent Seven ahead on earnings growth, a possible first for that wider group since Q4 2022.
FactSet said analysts forecast a 30.6% year-over-year gain for the 493 companies, while the Magnificent Seven are expected to grow earnings 23.6%. The Q4 numbers remain projections, not reported results.
The most recent time the wider group exceeded the seven was Q4 2022, when earnings among the 493 rose 1.6%, while the seven’s fell 30.6%, FactSet said. The current comparison gives the wider group a lead in forecast growth, but Q3 figures point the other way.
The Magnificent Seven have a 33.2% earnings-growth estimate for that quarter, ahead of a blended 27.7% for the remaining 493. FactSet’s blended Q3 figure combines published results for companies that have already reported with projections for those that have not. The Q4 estimates, by contrast, look ahead to a quarter whose results are still pending.
For Q3, FactSet identifies NVIDIA and Meta Platforms as the seven’s largest contributors to estimated earnings growth. Excluding them lowers the estimated growth rate for the other five to 7.5%.
For the full S&P 500, FactSet pegged its blended Q3 growth estimate at 29% on Oct. 16, as detailed in FactSet’s Oct. 16 estimate for S&P 500 earnings growth. That figure was down from 29.4% a week earlier. If it holds, it would be the third consecutive quarter above 25% and the eighth straight quarter with double-digit growth, FactSet said.
FactSet expected 79 S&P 500 companies to report results during the week starting Oct. 19, including five Dow 30 members. Third-quarter reports from Meta Platforms and Tesla are scheduled for Wednesday, Oct. 21.
