It's only November — but if you're like most investors — 2024 is what matters now. And some S&P 500 companies already look primed to put up big numbers.
Seven companies, including health care play Merck, industrial Stanley Black & Decker and Estee Lauder, are poised to post 2024 adjusted earnings per share that's 100% or more higher than this year's, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. That's a knockout amount of growth. It's a standout even in what's supposed to be a strong 2024 for earnings growth for most other S&P 500 companies.
"Now that the (third quarter) 2023 earnings reporting period has essentially come to a close, 2024 EPS growth projections as of Nov. 24 show the S&P 500 posting an 11.1% increase," says Sam Stovall, strategist at CFRA. "Due to seasonality, momentum, and EPS growth projections, we still think there is upside potential for the market and growth stocks."
Get Ready For Profit Growth In 2024 Again
The S&P 500 rallied nearly 20% in 2023 despite lackluster profit growth during the year. Just imagine what's possible once companies start putting up solid growth again as expected in 2024.
Companies in the S&P 500, all told, only saw their profit rise 0.6% in 2023, FactSet says based on current estimates. That's a fraction of the more than 10% profit growth expected in 2024. And even that solid growth number for next year may be conservative. Stovall figures many growth companies in the S&P 500 will put up even larger jumps in 2024 profit. He says profit projections point to 14.5% higher earnings growth in 2024 for growth companies.
Much of the high-octane profit growth is seen coming from the communications services, consumer discretionary, health care and technology sectors, Stovall said. "Yes ... health care is a growth group, since 71% of its market cap is deemed 'growth,' " he said.
Finding Big Profit Gains In 2024
Health care may not seem like a huge source of profit growth, but analysts have high hopes for the sector in 2024.
Analysts think Merck will earn $8.44 a share in 2024. If that's right, it means the pharmaceutical giant's profit will jump 520% in 2024 from 2023. That's the largest expected profit jump of any S&P 500 company next year. It's also poised to be a welcome change from 2023, where profit is on track to plunge more than 80%.
Similarly, analysts hold high hopes for another mega drug company, Pfizer. The company's adjusted profit per share is seen hitting $3.16 a share in 2024. If that happens, it would mark a 102% increase from the prior year. And again, that sure beats the company's 76% plunge in profit in 2023, due to the drying up of demand for Covid-19 vaccines.
It's fair to say many of the biggest jumps in 2024 earnings are likely to come from companies that posted big profit drops in 2023. Toolmaker Stanley Black & Decker is a good example. Its profit in 2024 is seen jumping more than 250%. That's the second highest among the S&P 500. But it's also important, as well, to point out that its profit plunged more than 70% in 2023.
One thing's for sure, hopes are much higher for profit growth in 2024 than happened in 2023. Now it's time to see if the S&P 500 companies can actually deliver.
S&P 500 Companies To Boost Profit The Most in 2024
Based on analysts' estimates for 2024 adjusted profit per share
| Company | Ticker | Earnings per share 2024 % gr. (estimate) | Sector |
|---|---|---|---|
| Merck | 513.3% | Health Care | |
| Stanley Black & Decker | 250.5% | Industrials | |
| Estee Lauder | 192.6% | Consumer Staples | |
| Tyson Foods | 177.6% | Consumer Staples | |
| Paramount Global | 129.5% | Communication Services | |
| Digital Realty Trust | 103.9% | Real Estate | |
| Pfizer | 102.3% | Health Care |
