For three consecutive years, double-digit profits are expected, Wall Street says that the bull market in US stocks still has support.

Observers who doubt that the growth engine of American businesses is about to stall need to take note: there is still fuel in the tank. Data compiled by Jefferies shows that sell-side analysts are transmitting information that, through a bottom-up target price consensus analysis, the earnings growth of the S&P 500 index is expected to accelerate annually before 2027. This will three consecutive years of double-digit earnings expansion, a rare occurrence in history that is often accompanied by above-average returns for the S&P 500 index. To achieve this forecast, favorable conditions are needed in terms of currency and geopolitics. Nonetheless, this estimation reflects a confidence among Wall Street researchers that, despite market concerns over excessive concentration of positions and high valuations, the key pillar supporting this three-year bull market, corporate earnings resilience, remains firm. "Earnings growth is not only expected to sustain above the long-term historical average, but may even further accelerate," said Andrew Greenbaum, Senior Vice President of Jefferies USA Stock Products. "Coupled with generally supportive fundamentals for U.S. stocks, the situation appears more optimistic." Data shows that there are about four weeks until the fourth-quarter earnings season, with analysts forecasting that S&P 500 index companies will achieve an 8.3% profit growth. This will drive the annual profit growth to reach 12%. For next year's forecast, after the peak period of trade policy uncertainty, earnings per share expectations have climbed 5% to $310, indicating a 13% year-on-year profit growth. By 2027, this figure is expected to rise to 14%. Over the past 35 years, the S&P 500 index has only seen two instances of consecutive three-year double-digit earnings growth: in 1993-1995 and 2003-2005. During each period, the benchmark index achieved an annualized return of 13%, surpassing its multi-year average of 10%. Data shows that the information technology, materials, and industrial sectors are expected to achieve the highest year-over-year profit growth by 2026. Defensive consumer staples stocks, typically known for their defensive characteristics, are predicted to lag behind the broader market in profit expansion. Sell-side analysts covering S&P 500 stocks are known for their non-doubting stance, so their expectations may already be on the high side. Analyst Michael Casper says, "Earnings prospects are indeed strong, but when expectations are so high, if performance falls short, we often see some volatility." Uncertainty still exists regarding the pace of Fed rate cuts, and the full impact of President Trump's tariff policies on the economy has yet to fully materialize. For some on Wall Street, optimism comes from the acceleration of profit expansion in sectors beyond small tech giants that are driving this current rally. It is estimated that S&P 500 index component stocks, excluding the "big seven," will achieve 13% profit growth in 2026, not far off from the expected 18% growth of the seven major high-growth giants. Optimism about fiscal and monetary stimulus policies may also be helpful. "The overall environment is positive for risk assets," wrote Manish Kabra, Head of US Stock Strategy at French Industrial Bank, predicting that the S&P 500 index will reach 7300 points next year and is bullish on sectors such as industrials, utilities, and financials. "It is still too early to claim that the bull market is over."