Wall Street is cutting Q3 earnings estimates — why that's 'not a cause for worry'

Published On Sep 10, 2024, 11:48 AM

Wall Street has reduced its Q3 earnings estimates by 2.8%, which is not as alarming as it seems. Analysts often cut estimates as the quarter progresses, with an average reduction of 3% over the last 20 years. This year's downward revisions could actually create a lower performance benchmark for companies during earnings season, potentially leading to better-than-expected results. The current forecast predicts 4.9% year-over-year earnings growth for Q3, with a positive outlook for continuing earnings growth into 2025, particularly outside of the tech sector.