In October, the S&P 500 advanced 2.27 per cent with mixed results. There were six sectors that delivered gains in the month and five sectors reported negative price returns. The technology sector was the leader with a 6.2-per-cent price return, followed by the health care sector with a 3.5-per-cent gain.
The top 10 performers in the S&P 500 Index in Oct. were:
- Advanced Micro Devices (AMD-Q), up 58 per cent
- Micron Technology Inc. (MU-Q), up 34 per cent
- Teradyne (TER-Q), up 32 per cent
- JB Hunt Transport Services (JBHT-Q), up 26 per cent
- Western Digital (WDC-Q), up 25 per cent
- Cardinal Health (CAH-N), up 22 per cent
- Albemarle (ALB-N), up 21 per cent
- First Solar (FSLR-Q), up 21 per cent
- Caterpillar (CAT-N), up 21 per cent
- Intuitive Surgical (ISRG-Q), up 19 per cent
For the first 10 months of the year, the S&P 500 has a price return of 16.3 per cent.
The third quarter earnings season is well underway.
According to a report from LSEG published on Nov. 5, of the 379 companies in the S&P 500 that have reported their quarterly results, 83 per cent have delivered better-than-expected results - the highest level since 2021. Earnings growth for the third quarter is forecast to come in at 16.2 per cent year-over-year driven by the technology sector with 28.1 per cent year-over-year earnings growth forecast, followed by financials with 23.6 per cent year-over-year earnings growth anticipated. Once again, the energy sector has the lowest earnings outlook with a year-over-year decline of 3.8 per cent expected.
Solid earnings growth is forecast for this year and next year. Year-over-year earnings growth for the fourth quarter of 2025 is expected to come in at 8.1 per cent, up from last month’s 7.7 per cent forecast. Year-over-year earnings growth is anticipated to come in at 12.4 per cent in 2025, up from 10.8 per cent forecast last month, climbing to 13.8 per cent in 2026, down slightly from 13.4 per cent forecast last month.
Historically, November has been a positive month for the S&P 500 Index. The index has posted gains in nine of the past 10 years. To illustrate, the S&P 500 Index advanced 5.7 per cent in Nov. 2024, rallied 8.9 per cent in 2023, climbed 5.4 per cent in 2022, fell just 0.8 per cent in 2021, and jumped 10.8 per cent in 2020.
According to the LSEG report, the forward four-quarter price-to-earnings multiple for the S&P 500 stood at 22.9 times, down from 23.3 times as of Sept. 26.
Now, here’s a look at analysts’ target prices, recommendations, forecast returns and yields for all securities in the S&P 500 grouped by sector and ranked according to their expected price returns (excluding dividend and distribution income). The posted target price for each security is an average of all available target prices from analysts. A target price typically reflects an expected share or unit price 12 months from now based on an analyst’s financial modelling, such as a discounted cash flow or sum-of-the-parts model. Data is as of Oct. 31.
It’s important to note that high target prices, which imply stellar returns that seem unbelievable may be just that - unrealistic. At times, when a stock price falls analysts may maintain their bullish expectations, inflating the forecast return. In addition, an outlier (extreme target price) can skew the average target price, to the upside or downside, particularly when the number of analysts covering a stock is low. Don’t let a huge projected gain lure you into a position – it is critical to look at the company and industry fundamentals.
Click here to download an Excel version of the report.
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