Wall Street has sky-high expectations for second quarter earnings

The bar is set super high for this coming earnings season — maybe a little too high.

Quick insight: Following the strength of first quarter earnings, analysts have set a high bar for the second quarter. They're expecting S&P 500 (^GSPC) earnings per share (EPS) to grow 22% year over year, according to Goldman Sachs strategist Ben Snider. This is the highest estimate heading into earnings season since 2021.

Coming into the first quarter, analyst estimates pointed to 12% EPS growth for the S&P 500. The realized growth rate of 27% exceeded that forecast by 15 percentage points. The elevated bar this quarter suggests that S&P 500 EPS growth will exceed the consensus estimate by a smaller magnitude than in the first quarter, Snider noted.

The reason: Companies have a lot on their plates, hinting that earnings estimates are a little too high right now.

Investors must watch whether megacap tech giants such as Microsoft (MSFT) and Meta (META) can show tangible revenue from artificial intelligence to justify their massive, multibillion-dollar infrastructure capital expenditures.

Wall Street will also be laser-focused on corporate margin durability, tracking how well companies are absor

Fuente original: Yahoo Finance (https://finance.yahoo.com/markets/article/wall-street-has-sky-high-expectations-for-second-quarter-earnings-141310243.html)