In April, the S&P 500 soared 10.4 per cent as earnings growth expectations surged.
Last month, nine sectors in the S&P 500 Index delivered positive price returns while just two sectors reported losses. Sectors with the highest price returns were communication services, technology, consumer discretionary, real estate and industrials with gains of 18.4 per cent, 17.4 per cent, 11.7 per cent, 8.6 per cent and 7.9 per cent, respectively. Sector detractors were energy and health care with declines of 3.5 per cent and 0.6 per cent, respectively.
The top 10 performers in the S&P 500 Index in April were:
- Intel Corp. (INTL-Q), up 114 per cent
- Advanced Micro Devices (AMD-Q), up 74 per cent
- Sandisk Corp. (SNDK-Q), up 73 per cent
- Seagate Technology Holdings (STX-Q), up 72 per cent
- Centene Corp. (CNC-N), up 64 per cent
- ON Semiconductor (ON-Q), up 63 per cent
- Western Digital Corp. (WDC-Q), up 61 per cent
- Micron Technology Inc. (MU-Q), up 53 per cent
- NXP Semiconductors (NXPI-Q), up 49 per cent
- Monolithic Power Systems Inc. (MPWR-Q), up 48 per cent
Strong earnings growth is driving equity markets higher. According to a report from LSEG I/B/E/S published on May 1, of the 314 companies in the S&P 500 that have reported their quarterly financial results, 83 per cent delivered better-than-expected results, which is higher than the long-term average of 67 per cent. Year-over-year forecast earnings growth for the first quarter jumped to 27.8 per cent, up from 14.4 per cent expected as of April 1.
The communication services sector saw the largest revision with 55.1-per-cent earnings growth forecast in the first quarter, up from a decline of 2.4 per cent anticipated as of April 1. The technology sector now has the second highest growth rate with earnings expected to grow 51.9 per cent year-over-year in the first quarter.
Earnings growth is expected to gain momentum. Year-over-year earnings growth is anticipated to come in at 22.6 per cent in 2026, up from 15.6-per-cent earnings growth forecast at the start of the year. Year-over-year earnings growth is forecast to expand 27.8 per cent in the first quarter of 2026, 22 per cent in the second quarter of 2026, 23.5 per cent in the third quarter and 21 per cent in the fourth quarter of 2026.
According to LSEG, the forward four-quarter price-to-earnings multiple for the S&P 500 stood at 21 times, down from 21.6 times as of March 6.
For the first four months of 2026, the S&P 500 Index is up 5.3 per cent, bouncing back into positive territory after April’s strong snapback.
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 April 30.
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.