S&P 500: Did Banks Set the Stage for Another Quarter of Double-Digit EPS Growth?

• Q4 earnings for big banks were marked by robust bottom-line performance despite some top-line misses
• CEOs appear confident as the earnings season kicks off according to our latest LERI reading
• Peak earnings season begins next week and runs until February 27

Big Banks Q4 Recap: Profits Up, Guidance Mixed

The "Big Six" US banks (JPM, BAC, C, WFC, MS, GS) delivered robust Q4 2025 performance on the bottom-line with half (C, WFC, GS) missing on the top-line due to mostly one-time charges. Bright spots included a resurgence in investment banking and strong loan demand, despite navigating a complex environment of falling interest rates and significant restructuring charges. Net Interest Income was expected to be a big headwind this quarter, but all with the exception of WFC handily beat expectations and provided positive guidance. 

While most firms handily beat EPS estimates, market reactions were largely muted or negative as investors grappled with cautious 2026 guidance (JPM), rising operational costs related to AI investments, and political uncertainty surrounding proposed credit card fee caps and Federal Reserve independence. Bank of America emerged as a standout with a 12% profit surge driven by record net interest income, while JPMorgan and Citigroup managed one-time "cleanup" costs, such as the Apple Card transition and the final exit from Russia, to signal a cleaner path forward for the coming year.

Overall, 7% of S&P 500 companies have reported results at this point. The blended EPS growth rate dipped slightly to 8.2% after the latest batch of results (and forward revisions), down from 8.3% in the week prior. Revenue growth expectations rose to 7.8% from 7.7% in the week prior. Thus far 79% of S&P 500® companies have surpassed expectations on the bottom-line, above the five and ten year averages. Positive revenue surprises are also on track to surpass the 10 year average, with 67% of companies surpassing estimates on the top-line, but slightly missing the 5-year average of 70%.

This coming week we’ll get Q4 results from 35 S&P 500 companies, and 577 companies in our global universe of 11,000 equities. 

CEOs Signaling Confidence in 2026

After rising to its highest level in four years during the last quarter of 2024, the Late Earnings Report Index, our proprietary measure of CEO uncertainty, has now recorded five consecutive quarterly readings below the historical benchmark as companies prepare to report their Q4 results. In fact, at a reading of 46 for the Q4 earnings season, CEOs are the most confident they’ve ever been as this is the lowest reading on record.  

The LERI tracks outlier earnings date changes among publicly traded companies with market capitalizations of $250M and higher. The LERI has a baseline reading of 100, and anything above that indicates that companies are feeling uncertain about their current and short-term prospects. A LERI reading under 100 suggests that companies feel they have a pretty good handle on the near-term. 

The official pre-peak season LERI reading for Q4 earnings (reports in Q1) stands at 46, the lowest Q4 LERI ever recorded. This is well below the baseline reading, suggesting when companies announced their earnings dates they were feeling more certain about economic conditions. As of January 14, there were 31 late outliers and 62 early outliers.

Source: Wall Street Horizon

On Deck This Week

This week is a shortened one for Wall Street with the Martin Luther King Jr. holiday on Monday, Jan 19. In the remaining four trading days we will get earnings releases from 35 S&P 500 companies and 577 companies in our global universe of 11,000 equities. Big names to watch include Netflix today, and Intel on Thursday. Peak season will not begin until the week of January 26.

Source: Wall Street Horizon

Q4 2025 Earnings Wave 

The peak weeks of the Q4 earnings season are expected to fall between January 26 - February 27, with each week expected to see over 1,000 reports. Currently, February 26 is predicted to be the most active day with 854 companies anticipated to report. Thus far, only 44% of companies have confirmed their earnings date (out of our universe of 11,000+ global names). The remaining dates are estimated based on historical reporting data.

Source: Wall Street Horizon