Investing.com -- Barclays analysts provided insights into the expected earnings per share (EPS) growth for various sectors within the S&P 500 for 2025, predicting an overall growth rate of 12.8%.
This represents a significant increase compared to the pre-pandemic median of approximately 7%.
The Technology sector is poised to lead the way, with "Big Tech" companies such as Meta (NASDAQ:META), Apple (NASDAQ:AAPL), Nvidia (NASDAQ:NVDA), Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), and Alphabet (NASDAQ:GOOGL) projected to achieve an impressive 18% EPS growth.
This is a deceleration from the over 30% growth seen in 2024 but still marks strong performance.
Barclays (LON:BARC) adds that the broader Technology sector is also expected to expand by 17% in EPS, following a modest 11% growth in 2024.
Healthcare, Industrials, and Materials sectors are anticipated to surpass their long-term trends in 2025, benefiting from a positive base effect after a weaker performance in 2024.
The EPS growth estimates for these sectors are 20.9%, 16.2%, and 16.1%, respectively.
Barclays believes these estimates indicate a rebound and sustained upward momentum, with the market showing particular optimism for their recovery.
However, the bank warns that such high growth expectations could be overly optimistic, particularly for Industrials and Materials.
The report cautions that these sectors might face downward revisions as the year progresses, given the historically bullish nature of early-year estimates.
“We would caveat that year-ahead estimates are often too bullish and get revised down over time. We see the most downside for current Industrials and Materials estimates based on our own bottom-up EPS framework, and believe that their significantly above-trend growth assumptions are most at risk as we begin 2025,” Barclays wrote.
Elsewhere, consumer discretionary's 2025 EPS growth estimate is 9.9%, while consumer staples is at 5%, energy is at 4%, financials at 8.1%, information technology at 19.4%, and utilities at 4.1%.