Goldman Sachs Group strategist Ben Snider stated that the profit outlook for US companies in 2026 remains solid, alleviating concerns previously triggered by a lackluster earnings season. Ben Snider indicated that among the S&P 500 index constituent companies that have issued 2026 earnings per share forecasts, more than half have provided guidance above analyst expectations, a proportion that exceeds the historical average of 40%. These figures offer reassurance to investors, who had been largely unimpressed by the fourth-quarter results. According to data compiled by Bloomberg Intelligence (BI), with the earnings season nearly halfway through, approximately 78% of S&P 500 companies have reported results that beat expectations, a rate lower than the previous two quarters. The bar for further stock market gains is high following last year's record-breaking rally that pushed up valuations, but companies offering brighter prospects are being rewarded. Analysts have maintained their prior consensus expectations unchanged. Lockheed Martin Corp's stock rose 4% after forecasting 2026 profits above analyst expectations; Verizon Communications Inc. saw its stock achieve its largest gain since October 2008 after its adjusted profit and free cash flow forecasts both surpassed consensus estimates. Meta Platforms Inc. (META.US) saw its stock surge 10% after providing a revenue forecast significantly stronger than expected, which helped offset the impact of increased AI-related expenditures. In contrast, disappointing financial reports have been harshly penalized. Microsoft Corp. (MSFT.US) stock fell sharply after the software giant's results showed a tepid growth reading for its Azure cloud computing business. Since the beginning of this earnings season, the market consensus expectation for S&P 500 earnings growth in 2026 has remained largely stable, with the Goldman Sachs team projecting 12% growth for the benchmark index's constituents. According to BI-compiled data, the analyst consensus expectation is 13.5%. Meanwhile, JPMorgan Chase & Co. strategist Mislav Matejka said the performance this earnings season appears "encouraging." "Strong earnings delivery should support corporate capital expenditure, and this trend seems to be accelerating and broadening," Matejka stated, adding, "Earnings are performing well."
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