Category: 3. Business

US companies’ earnings are growing at the fastest pace in four years, defying predictions that President Donald Trump’s trade war would trigger a slowdown across corporate America.

Median earnings growth year-on-year across the Russell 3000 index — a benchmark for the entire US stock market — hit 11 per cent in the third quarter, up from 6 per cent in the previous three months, according to Morgan Stanley. That is the fastest growth rate since the third quarter of 2021.

Six of the 11 sectors that make up the blue-chip S&P 500 index have reported positive average earnings growth in the three months to September, according to Deutsche Bank analysts, up from just two — financials and megacap technology stocks — between April and June. 

The buoyant growth comes despite warnings earlier this year from executives that Trump’s sweeping tariffs would push up costs, hit supply chains and pose a threat to economic growth.

“Companies have found ways to absorb the tariff impact and consumers will keep spending so long as they have a job,” said Dec Mullarkey, managing director at SLC Management, which runs $300bn in assets. 

Goldman Sachs equity strategist David Kostin said the vast majority of S&P 500 companies have reported their third quarter figures and results so far are above analysts’ consensus forecasts and one of the highest rates on record. 

“In our 25-year data history, this frequency of earnings surprises has been surpassed only during the Covid reopening period in 2020-2021,” he wrote in a note to clients this week.

Analysts expect earnings to grow by 7.5 per cent in the fourth quarter, according to data provider FactSet.

Corporate sentiment has been helped by trade deals with Japan and the EU, while last month Trump and Chinese leader Xi Jinping agreed a one-year trade truce.

Carmakers Ford and General Motors have said they expect a smaller tariff hit as a result of the Trump administration’s extended relief measures for imported car parts.

Power companies, real estate groups and industrials are also recording strong sales growth and expanding margins. NRG Energy benefited from data centre construction and improving travel demand boosted Southwest Airlines.

Banks including Goldman Sachs, Citigroup and JPMorgan Chase have posted bumper profits, helped by a resurgence of dealmaking activity and strong trading income thanks to financial market volatility.

Despite Meta disappointing the market with hefty capital expenditure plans, Big Tech groups such as Alphabet, helped by Google’s search and advertising business, and Microsoft posted results that topped analysts’ estimates.

However, warnings from some consumer-facing companies suggest many Americans may be struggling, say analysts.

The chief executive of packaged foods group Kraft Heinz flagged consumer sentiment going into the Christmas period as “one of the worst” in decades, while hamburger chain McDonald’s said customers had been pulling back from its more expensive offerings.

Companies selling goods rather than services “have been the clear laggards” this earnings season, said Deutsche analysts, with “consumer-facing companies” faring worse than those selling predominantly to other businesses.

The absence of official jobs data caused by the US government shutdown has added to investors’ uncertainty about the state of the labour market and the health of the consumer.

Alternative sources of data including the National Federation of Independent Business, the San Francisco Federal Reserve and state-level jobless claims show the jobs market “is still doing well”, said Torsten Sløk, chief economist at investment firm Apollo Global Management.

That is despite significant lay-offs by big companies recently, with at least 17 S&P 500 groups, including Amazon, UPS and Target, shedding roughly 80,000 jobs since the start of September, according to Goldman Sachs. 

The University of Michigan’s index of consumer sentiment fell to a three-year low in November. Falling confidence “was widespread throughout the population, seen across age, income and political affiliation”, said Joanne Hsu, the survey’s director.

There was “one key exception”, Hsu added — sentiment among consumers with large stock holdings rose 11 per cent.

Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management, said a “widening chasm” between the haves and have-nots explained why consumer demand appeared resilient despite the weakening labour market.

The top 40 per cent of households by income “control nearly 85 per cent of America’s wealth, two-thirds of which is directly tied to the stock market, which has climbed more than 90 per cent in three years”, she said.

As a result, “forecasting the labour market may increasingly be less important than forecasting the direction of the stock market itself in order to understand consumption levels”.

Golar LNG Limited (NASDAQ:GLNG) shareholders are probably feeling a little disappointed, since its shares fell 6.4% to US$38.42 in the week after its latest third-quarter results. It was an okay result overall, with revenues coming in at US$123m, roughly what the analysts had been expecting. Earnings are an important time for investors, as they can track a company’s performance, look at what the analysts are forecasting for next year, and see if there’s been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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Taking into account the latest results, the most recent consensus for Golar LNG from six analysts is for revenues of US$375.2m in 2026. If met, it would imply a notable 15% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to ascend 17% to US$0.69. Before this earnings report, the analysts had been forecasting revenues of US$384.6m and earnings per share (EPS) of US$0.80 in 2026. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.

Check out our latest analysis for Golar LNG

Despite the cuts to forecast earnings, there was no real change to the US$51.79 price target, showing that the analysts don’t think the changes have a meaningful impact on its intrinsic value. That’s not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Golar LNG at US$57.00 per share, while the most bearish prices it at US$44.50. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. One thing stands out from these estimates, which is that Golar LNG is forecast to grow faster in the future than it has in the past, with revenues expected to display 12% annualised growth until the end of 2026. If achieved, this would be a much better result than the 5.0% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 3.1% per year. So it looks like Golar LNG is expected to grow faster than its competitors, at least for a while.

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Golar LNG. They also downgraded Golar LNG’s revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. The consensus price target held steady at US$51.79, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Golar LNG going out to 2027, and you can see them free on our platform here.

We don’t want to rain on the parade too much, but we did also find 2 warning signs for Golar LNG (1 is significant!) that you need to be mindful of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

By Christine Idzelis

The S&P 500 is down in November as the U.S. government shutdown persists

It’s been a rough start to November for the U.S. stock market.

The U.S. stock market is off to its worst start to a month since April as investors grapple with the longest U.S. government shutdown in history, among other worries.

“If the shutdown extends much longer,” going beyond next week and into the Thanksgiving holiday, “then I think we’ll get the full-blown correction” in the stock market, said Jamie Cox, a financial advisor and managing partner at Harris Financial Group, in a phone interview Friday. The market is now “awake to the risks” associated with a drawn-out shutdown, he said, sending a message this week that it could start hurting corporate profits.

The shutdown, which began at the start of October, is now disrupting air travel and raising concerns that it could strain consumers as the holiday season approaches, while shaving growth off the economy. The Dow Jones Industrial Average DJIA, S&P 500 SPX and Nasdaq Composite COMP all finished Friday with weekly losses – each booking their worst five-day start to a month since April, when President Donald Trump’s “liberation day” tariffs roiled markets, according to Dow Jones Market Data.

Below is more on what’s worrying the U.S. stock market at the moment.

Government shutdown

The shutdown has left investors navigating markets without the typical batch of economic reports from the U.S. government that give a fuller picture on the health of the economy.

Meanwhile, “flights are delayed, food programs are in trouble and federal workers aren’t being paid,” said Thomas Block, a Washington policy strategist at Fundstrat, in a note to the firms’ clients Friday. “There is some optimism that the shutdown can come to an end next week, but the key could be whether President Trump wants to personally engage.”

Alec Phillips, Goldman Sachs’s chief U.S. political economist, estimated in a Nov. 2 research note that if the shutdown lasts around six weeks, it could reduce quarter-on-quarter annualized real growth in gross domestic product over the final three months of 2025 by 1.15 percentage points, “primarily as a result of federal employee furloughs.”

Concerns about consumers

The University of Michigan’s consumer-sentiment index released Friday fell in November to the lowest level since the record low seen in June 2022. The preliminary reading indicated that consumer sentiment has soured more this month than Wall Street expected.

“With the federal government shutdown dragging on for over a month, consumers are now expressing worries about potential negative consequences for the economy,” Joanne Hsu, director of the University of Michigan’s Surveys of Consumers, said Friday on the university’s website.

“This month’s decline in sentiment was widespread throughout the population, seen across age, income and political affiliation,” she noted. “One key exception: Consumers with the largest tercile of stock holdings posted a notable 11% increase in sentiment, supported by continued strength in stock markets.”

Investors will be watching to see if consumers continue to spend during the holidays, despite feeling gloomy. Normally, investors would see monthly data from the government on U.S. retail sales next week on Nov. 14, but the shutdown has disrupted the usual economic calendar.

Labor-market worries

The U.S. stock market slumped Thursday after a report from outplacement firm Challenger, Gray & Christmas showed that layoffs soared in October. Alternative data sources such as the Challenger report are getting heightened attention from investors amid the vacuum of economic data during the shutdown. Normally, the government would have released on Friday a U.S. jobs report for October, but it wasn’t available due to the shutdown.

Stock-market valuations

Investors are worried that the enthusiasm around artificial intelligence has propelled the S&P 500 to a series of record highs this year that have left it both richly valued and extremely top-heavy.

The S&P 500 has outsize exposure to Big Tech stocks that trade at lofty multiples of earnings compared to the index. Meanwhile, the index’s information-technology sector XX:SP500.45 just had its worst week since April, ending Friday with a weekly loss of 4.2%, according to FactSet data.

Despite stumbling in November, the S&P 500 ended Friday 2.4% below its record close on Oct. 28, according to Dow Jones Market Data. A stock-market correction would entail a drop of at least 10% from a recent peak.

“Pullbacks are normal,” said Carol Schleif, chief market strategist at BMO Private Wealth, in a phone interview Friday. “They’re never comfortable, but they’re normal.”

-Christine Idzelis

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

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CGI Inc. (TSE:GIB.A) came out with its annual results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Revenues of CA$16b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at CA$7.35, missing estimates by 2.5%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there’s been a strong change in the company’s prospects, or if it’s business as usual. Readers will be glad to know we’ve aggregated the latest statutory forecasts to see whether the analysts have changed their mind on CGI after the latest results.

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Taking into account the latest results, the consensus forecast from CGI’s 13 analysts is for revenues of CA$16.7b in 2026. This reflects a satisfactory 5.1% improvement in revenue compared to the last 12 months. Per-share earnings are expected to expand 16% to CA$8.86. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$16.7b and earnings per share (EPS) of CA$8.77 in 2026. So it’s pretty clear that, although the analysts have updated their estimates, there’s been no major change in expectations for the business following the latest results.

View our latest analysis for CGI

It will come as no surprise then, to learn that the consensus price target is largely unchanged at CA$157. That’s not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on CGI, with the most bullish analyst valuing it at CA$185 and the most bearish at CA$137 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We can infer from the latest estimates that forecasts expect a continuation of CGI’shistorical trends, as the 5.1% annualised revenue growth to the end of 2026 is roughly in line with the 6.0% annual growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 12% annually. So it’s pretty clear that CGI is expected to grow slower than similar companies in the same industry.

The most obvious conclusion is that there’s been no major change in the business’ prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it’s tracking in line with expectations. Although our data does suggest that CGI’s revenue is expected to perform worse than the wider industry. The consensus price target held steady at CA$157, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for CGI going out to 2028, and you can see them free on our platform here..

You can also see whether CGI is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Last week, you might have seen that Cameco Corporation (TSE:CCO) released its third-quarter result to the market. The early response was not positive, with shares down 9.7% to CA$129 in the past week. Cameco’s revenues suffered a miss, falling 18% short of forecasts, at CA$615m. Statutory earnings per share (EPS) however performed much better, reaching break-even. This is an important time for investors, as they can track a company’s performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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After the latest results, the 14 analysts covering Cameco are now predicting revenues of CA$3.71b in 2026. If met, this would reflect a modest 7.1% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 79% to CA$2.16. Before this earnings report, the analysts had been forecasting revenues of CA$3.72b and earnings per share (EPS) of CA$2.38 in 2026. So it looks like there’s been a small decline in overall sentiment after the recent results – there’s been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

View our latest analysis for Cameco

It might be a surprise to learn that the consensus price target was broadly unchanged at CA$146, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Cameco analyst has a price target of CA$175 per share, while the most pessimistic values it at CA$100.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Cameco shareholders.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It’s pretty clear that there is an expectation that Cameco’s revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 5.6% growth on an annualised basis. This is compared to a historical growth rate of 17% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.0% per year. Even after the forecast slowdown in growth, it seems obvious that Cameco is also expected to grow faster than the wider industry.

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Cameco. Fortunately, they also reconfirmed their revenue numbers, suggesting that it’s tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates – from multiple Cameco analysts – going out to 2027, and you can see them free on our platform here.

However, before you get too enthused, we’ve discovered 1 warning sign for Cameco that you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Mentions of artificial intelligence (AI) have surged on earnings calls, yet only a small fraction of firms have applied it in ways that have meaningfully affected their business. A 2025 multi-method study from MIT NANDA (Networked Agents and Decentralized AI) found that just 5% of organizations report measurable ROI from their investment in generative AI. While the study may not represent all organizations and industries, it reveals that enthusiasm for AI does not always guarantee business value.

Gallup’s own research finds a similar conclusion. Even as the availability of AI technologies has accelerated in the past two years, access does not necessarily lead to AI adoption among employees or a return on investment. Bottlenecks often stem from unclear localized use cases and resistance from middle managers and frontline employees. “The irony of labour-saving automation,” writes The Economist, “is that people often stand in the way.”

Gallup’s research on AI adoption suggests that managers who actively encourage AI use not only generate higher AI adoption but also help their teams identify applications that fit existing workflows and solve real problems, creating greater value from AI tools. Within organizations that are investing in AI technology, employees who strongly agree their manager supports AI use are nearly nine times as likely to strongly agree that it helps them do what they do best every day.

What Prevents AI Adoption? The Top Barriers

Even in organizations that have begun implementing AI, many employees are unsure how it fits into their work. When asked to identify the greatest barrier to AI adoption in their workplace, the top response was an unclear use case or value proposition (16%). AI adoption challenges like this may reflect situations where an AI’s utility is immediately unclear but also concerns about whether AI can evolve or integrate with existing processes or tools. Concerns about legal or privacy risks ranked a close second at 15%, followed by a lack of training or necessary knowledge (11%).

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Many Employees Still See AI as Irrelevant to Their Work

Input from those who do not use AI in their role reinforces that showing the job-specific value and benefits of AI use is fundamental to adoption. Nearly half (44%) of these employees say the main reason they do not use AI tools in their role is that they don’t believe AI can assist with the work they do.

Just 16% percent of non-users say they don’t use AI primarily because they do not have access to AI tools at their organization. Others cite resistance to change in the way they do their job (11%), lack of knowledge of how to use AI tools (10%), feeling unsafe using AI tools (8%), or some other reason (10%). These data underscore that real AI adoption and value depend on addressing the barriers employees face when using AI tools and showing how those tools can improve their work.

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What Makes a Difference in the Adoption of AI

The top barriers to AI adoption in business present real challenges, but leaders can address them with targeted strategies. Gallup identified four AI adoption best practices associated with higher AI usage and stronger evaluations of its benefits among employees:

1. Communicate a clear strategy for AI integration. Employees are more likely to engage with AI when they see that their organization has a defined approach, understands AI risks and concerns, and is prepared to address them. This signals that AI adoption is intentional and connected to broader business goals.
2. Champion AI use at the team level. Managers play a vital leadership role in translating the AI adoption strategy into action. By actively supporting AI use, modeling its application, and connecting it to the work employees actually do, managers make organizational plans relevant and practical.
3. Provide role-specific training that maximizes value and mitigates risk. Organizations should design training based on employees’ actual tasks and include guidance for secure use. This builds skill and confidence in using AI effectively.
4. Establish clear policies and guidelines for responsible use. Well-defined, accessible policies and guidelines give employees the confidence to explore AI’s potential while staying within organizational, legal, and ethical boundaries. Strong policies also address safety concerns that often deter adoption.

When combined, these AI adoption strategies help employees see AI’s value in the context of their own role and build the confidence to use it regularly. They also position managers to deliver the ongoing guidance and encouragement that turn access into sustained application.

Managers Lead the Way to AI Adoption

Because of their day-to-day connection with employees, managers are uniquely positioned to champion AI by modeling its use, answering questions and showing how it connects to employees’ daily work. Gallup data show that manager support has the strongest association with measurable differences in how employees use and value AI. Within organizations that are investing in AI technology, employees who strongly agree their manager actively supports their team’s use of AI are:

• 2.1 times as likely to use AI a few times a week or more
• 6.5 times as likely to strongly agree that the AI tools provided by their organization are useful for their work
• 8.8 times as likely to strongly agree that AI gives them more opportunities to do what they do best every day

Despite these clear benefits, many employees report a lack of active support from their managers when it comes to using AI. Only 28% of employees in organizations that have begun implementing AI technologies strongly agree their manager actively supports their team’s use of the technology, leaving significant room for improvement. This adoption gap continues to hold down overall AI adoption rates.

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Turn AI Access Into Results

The potential of AI in the workplace remains for many organizations, but its value depends on more than availability. Adoption and results are most likely when employees clearly understand how they can apply AI to their work and see its relevance to what they do. Managers play a central role in illustrating this relevance, guiding their teams in using AI effectively and making it a meaningful factor in performance.

Learn more about how the Gallup Panel works. View complete question responses and trends (PDF download).

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