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Investing.com -- The second-quarter 2025 reporting season is nearly complete, with results described as “very solid” by Wolfe Research analysts.
Through 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%,” Wolfe Research noted.
On the bottom line, “80% of companies have beaten consensus with a strong aggregate dollar-weighted surprise of 8.4%.”
Wolfe said this performance came despite “U.S. policy (tariff and monetary) [being] incredibly volatile throughout the quarter,” adding that forward guidance for the third quarter has also been strong.
“47% of companies have given midpoints above consensus estimates at the time of reporting,” the analysts wrote.
At the same time, valuations have surged. “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 said.
They noted 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.”
Wolfe expects “seasonal volatility to pick up in the weeks ahead” but said “the fundamental picture for stocks continues to be strong,” supported by “strong secular tailwinds, such as the AI Spending Narrative.”