EXANTE's May equity briefing offers a sobering read beneath the headline numbers: Q1 reporting closed as one of the strongest seasons in recent memory, but the distribution of that strength tells a more complicated story for investors.
Blended earnings growth came in at 28.6% against the 13.1% forecast at quarter-end, with an aggregate surprise factor of 16.7%, the widest since Q1 2021. Yet this outperformance was far from broad-based. The gains were concentrated in Communication Services, Consumer Discretionary, and Energy, while the equal-weighted S&P 500 trailed its cap-weighted counterpart by 2.64 percentage points across May. Only three of eleven sectors finished the month in positive territory.
As EXANTE notes, this was a season that rewarded structural alignment and treated the merely cyclical with suspicion.
The most striking divergence of the period sits with the Energy sector. Upward EPS near-term revisions arrived through the season, supported by oil pricing dynamics linked to Iran-related geopolitical tension, which lifted upstream economics. And yet, Energy was the worst-performing S&P 500 sector in May, falling 6.08%. The gap between forward earnings momentum and actual price performance is a sharp reminder that EPS revision and price return are not the same variable. Monetising an upward revision cycle requires a view not only on the durability of the underlying catalyst, but also on whether the revision has already been absorbed into consensus expectations and priced in accordingly.
The full briefing covers S&P 500 earnings growth and estimates for Q1, sectoral revisions and net profit margins, and sector-specific monthly performance across both US and European equities.