Deutsche Bank AG (NYSE: DB) and HSBC Holdings plc (NYSE: HSBC) expect a strong third-quarter U.S. earnings season, with AI-related businesses and energy producers providing important support. Their outlooks point to improving corporate guidance and resilient demand, although the banks emphasize different drivers of profit growth.
Deutsche Bank strategists led by Binky Chadha forecast S&P 500 earnings growth of 34% year over year, compared with consensus of 26.7% in their earnings preview, Investing.com reported on October 8. That would maintain the second quarter’s pace rather than deliver the slowdown analysts anticipated.
The bank expects earnings in its media, communications and technology grouping to rise 54%, contributing 21 percentage points to overall growth. Energy earnings are forecast to increase 129%, supported by higher oil prices, though that would be slower than the previous quarter. Its broader outlook also includes improving growth among consumer and industrial cyclicals.
HSBC strategist Alastair Pinder expects another season of earnings beats and higher guidance, according to an October 13 report. Corporate guidance is improving at its fastest pace since 2021, the bank says. Accelerating demand for AI inference and firm GPU rental prices underpin its preference for hyperscalers, the large cloud-computing companies serving that demand.
The season has already produced some strong results: Citigroup Inc. (NYSE: C) beat earnings and revenue estimates, as we previously reported. Still, stronger profits do not guarantee rising share prices. HSBC warns that higher Treasury yields can pressure valuations, while Deutsche Bank notes that expensive oil is weighing on earnings expectations in sectors including airlines and autos.
