UBS Equities-US Equity Strategy _1Q25 Earnings Brief May 06_ Simonds-115221320

ab6 May 2025Global ResearchUS Equity Strategy1Q25 Earnings Brief: May 0680.2% of the S&P 500's market cap has reported so far. 1Q expectations are for revenues to grow 4.7% and EPS by 9.6%. Earnings are beating estimates by 8.3% in aggregate, with 69% of companies so far topping projections. EPS is on pace for 10.0%, assuming the historical trend of estimate revisions through the end of reporting season.Projected EPS growth among groups varies significantly, as shown below (a blend of consensus estimates and reported results where available): Expected EPS Growth YoY
TECH+: 27.1%
Financials: 6.6%
Non-Cyclicals: 4.4%
Cyclicals ex-Energy: -0.9%
Energy: -17.5%Consensus expectations are for Cyclicals ex-Energy margins to contract -3.9%, only slightly worse than consensus expectations for Non-Cyclicals -2.0%. However, Non-Cyclicals sales are expected to grow 5.8%, largely offsetting the margin impact, led by Healthcare (+9.3%) and Utilities (+8.1%). The 6 largest TECH+ companies are expected to outgrow the rest of the market as a group (EPS Growth 31.7% vs. 4.0%), though forecasts vary for each company:Big 6 TECH+ EPS Growth (Expected vs. Actual, YoY)
GOOGL – 1Q25E: 6.5%; 1Q25A: 48.7%
META – 1Q25E: 12.2%; 1Q25A: 36.5%
MSFT – 1Q25E: 9.6%; 1Q25A: 17.7%
AAPL – 1Q25E: 6.4%; 1Q25A: 7.8%
AMZN – 1Q25E: 38.7%; 1Q25A: 62.2%
NVDA – 1Q25E: 43.7%; 1Q25A: Wednesday 05/28Over the next 5 trading days, 82 companies representing 6.0% of S&P 500’s market cap are due to report results, including AMD, Duke Energy, Walt Disney, Uber, Warner Bros, Discovery and Fox.This report has been prepared by UBS Securities LLC. ANALYST CERTIFICATION AND REQUIRED DISCLOSURES, including information on the Quantitative Research Review published by UBS, begin on page 17. UBS does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.Equity StrategyAmericasSean SimondsStrategist sean.simonds@ubs.com +1-212-713 2851Maxwell Grinacoff, CFAStrategist maxwell.grinacoff@ubs.com +1-212-713 3892Andrew GarthwaiteStrategist andrew.garthwaite@ubs.com +44-20-7567 4343Gerry FowlerStrategist gerry.fowler@ubs.com +44-20-7567 5490 US Equity Strategy 6 May 2025ab 2US Equity StrategyUBS ResearchS&P 500 Figure 1: S&P 500 EPS Growth 10.811.68.91Q242Q243Q244Q24E1Q25E%14.3Current ConsensusForecast10.0Expected Final Reported Growth9.6Source: Standard & Poor's, Refinitiv, FactSet, UBS Figure 2: S&P 500 EPS Growth - Impact from TECH+9.46.36.56.87.71Q242Q243Q244Q241Q25E%Source: Standard & Poor’s, Refinitiv, FactSet, UBS Note: Impact calculated as difference in EPS growth between S&P 500 and S&P 500 ex-TECH+Assuming revisions follow the typical pattern, we expect 1Q EPS growth to finish closer to 10.0% (vs. 9.6% today). TECH+ has had an outsized impact on