Corporate earnings have rarely looked this good.
With the earnings season more than halfway over, most companies in the S&P 500 have surpassed analysts’ profit expectations. As of Friday, results from 87% of those that have reported were better than expected, according to Refinitiv. That is above the historical average of 65% and on pace for the highest share since Refinitiv began tracking the metric in 1994.
And companies aren’t just beating estimates—they are topping them by far more than usual.
Going back to 1994, companies have beat earnings estimates by an average of 3.6%, according to Refinitiv. But this earnings season, companies have posted profits that have been 22.8% above expectations. All told, the recent string of strong results has S&P 500 companies on track to post their fastest rate of earnings growth since 2010.
The problem is that investors aren’t sure how much of the good news already has been baked into share prices.