Resiliency this earnings season is broader than appreciated with a median stock EPS growth rate of 16% and a beat rate of 6% (strongest in four years).

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Further, EPS revisions breadth has resumed its ascent with the momentum coming from Semis, Financials, Industrials and Consumer Cyclicals.

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Earnings strength continues,  with calendar 2026, and next twelve month EPS revisions (i.e., guidance) are up 2%, 3%, and 4%, respectively, over the last month. Revenue surprise is robust this quarter at 2.1% (versus a historical average of 1.3%). This, coupled with higher ISM Manufacturing Prices, indicates that pricing power continues to improve for corporates. As we have discussed at length, hyperscaler and semiconductor earnings have been major contributors to this revenue/earnings resiliency, and results last week reinforce that dynamic but it is comforting that the EPS strength is not limited to these cohorts:1Q EPS surprise for the median S&P 500 stock is 6%, the strongest it has been in 4 years. S&P 500 median stock earnings growth is 16% (2x the trailing 4Q average).

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BUT … we need EARNINGS to continue outgrowing. Buying the S&P 500 at a forward multiple at or above 21x has historically returned flat or negative 10 annualised returns, chart courtesy of Apollo.

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