The second-quarter 2025 earnings season is nearing its conclusion, and Wolfe Research analysts describe results as “very solid.”
As of Monday, 452 S&P 500 companies had reported earnings, with “69% of companies beating expectations on the top-line with an aggregate dollar-weighted surprise of +2.8%,” according to Wolfe Research.
On the bottom line, “80% of companies have beaten consensus with a strong aggregate dollar-weighted surprise of 8.4%.”
Wolfe noted that this performance came despite “U.S. policy (tariff and monetary) [being] incredibly volatile throughout the quarter,” adding that forward guidance for Q3 has also been robust. “47% of companies have given midpoints above consensus estimates at the time of reporting,” the analysts said.
At the same time, market valuations have climbed sharply. “With large cap indices trading at all-time highs, valuations have returned to their nosebleed levels, as the S&P 500 is currently trading at 22.3x NTM Forward EPS,” Wolfe noted.
They also highlighted that “tariff volatility depressed the earnings outlook for the S&P 500 after the Trump Administration’s Liberation Day,” but estimates have since “bounced back as companies continue to beat expectations and provide solid forward guidance.”
Looking ahead, Wolfe expects “seasonal volatility to pick up in the weeks ahead” but emphasized that “the fundamental picture for stocks continues to be strong,” supported by “strong secular tailwinds, such as the AI Spending Narrative.”
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