Zacks Earnings Trends Highlights: Coca-Cola, CVS, Pepsi and Walgreens Boots Alliance

For Immediate ReleaseChicago, IL – February 13, 2025 – Zacks Director of Research Sheraz Mian says, "Total earnings for the 345 S&P 500 companies that have reported results are up +12.7% from the same period last year on +5.8% higher revenues”Breaking Down the Current Earnings OutlookNote: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>Here are the key points:With more than two-thirds of the Q4 earnings results already in, we can safely say that it has been a good reporting cycle, with the growth pace showing a notable accelerating trend and companies comfortably beating consensus estimates.Total earnings for the 345 S&P 500 companies that have reported results are up +12.7% from the same period last year on +5.8% higher revenues, with 78.0% beating EPS estimates and 65.5% beating revenue estimates.Q4 earnings for the ‘Magnificent 7’ group of companies are expected to be up +29.6% from the same period last year on +12.5% higher revenues. Excluding the ‘Mag 7’ contribution, Q4 earnings for the rest of the index would be up +8.4% (vs. +13.3%).Looking at the calendar year picture, total S&P 500 earnings are expected to grow by +13.5% in 2025, with nearly all sectors contributing to the growth pace. Sectors with double-digit earnings growth this year include Aerospace (+80.8%), Consumer Discretionary (+27.5%), Medical (+20.7%), Tech (+17.2%), Retail (+10.8%), Business Services (+11.0%), and Transportation (+13.9%). Recent Standout ReportsThe Coca-Cola KO and CVS CVS quarterly releases are good examples of ‘staply’ businesses that can surprise to the upside in the current environment. Coke and CVS shares have lagged the market over the past year, but they have nevertheless done better than their nearest rivals: Pepsi PEP in the case of Coke and Walgreens Boots Alliance WBA in the case of CVS.Coca-Cola had strong organic revenue numbers, with overall Q4 revenues up +11.8% from the same period last year despite significant foreign exchange headwinds. Guidance from both companies was in line with consensus expectations, but that still counts as a win in the challenged macro backdrop for Coke and CVS.CVS shares were up big on the earnings beat, further increasing the performance gap with Walgreens.Is The Tech Sector’s Earnings Outlook Starting to Shift?The Tech sector has been a significant growth driver in recent quarters, and the trend is expected to continue in 2024 Q4 and beyond. For Q4, Tech sector earnings are expected to be up +23.8% from the same period last year on +11.0% higher revenues, the 6th quarter in a row of double-digit earnings growth.This would follow the sector’s +22.7% earnings growth on +11% higher revenues in 2024 Q3.The Tech sector has also been among those few sectors that have steadily enjoyed an improving earnings outlook, with estimates steadily increasing. However, the more recent data on this count appears to show a shift in the revisions trend, as the chart below of aggregate 2025 earnings estimates for the sector shows.The Earnings Big PictureTotal S&P 500 earnings for the current period (2025 Q1) are currently expected to be up +7.7% from the same period last year on +4.1% high revenues.Estimates for the period have been coming down since the quarter got underway.The revisions trend is broad-based, with estimates for 15 of the 16 sectors down since the start of January (Medical is the only sector whose estimates have increased). Sectors suffering the most significant cuts to estimates include Conglomerates, Aerospace, Construction, Basic Materials, Autos, and others. Unlike other recent periods, estimates for the Tech sector have also been under pressure.The expectation is for double-digit earnings growth in each of the next two years, with the number of sectors enjoying strong growth notably expanding from the narrow base we have been seeing lately.In fact, 2025 is expected to have nearly all Zacks sectors enjoy earnings growth, with 7 of the 16 Zacks sectors expected to produce double-digit earnings growth. Unlike the last two years, when the Mag 7 group drove all or most of the aggregate earnings growth, we will have double-digit S&P 500 earnings growth in 2025, even without the contribution from this mega-cap group.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.comhttps://www.zacks.comZacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CocaCola Company (The) (KO): Free Stock Analysis Report PepsiCo, Inc. (PEP): Free Stock Analysis Report CVS Health Corporation (CVS): Free Stock Analysis Report Walgreens Boots Alliance, Inc. 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