- Over forty FTSE 100 members are due to report results between 27 July and 7 August
- Analysts expect them to generate more than three-quarters of FTSE 100 forecast aggregate profits in 2026
- Upside surprises from Unilever, Barclays and GSK therefore bode well, even if the results got different receptions in terms of share price
- FTSE 100 earnings forecasts continue to show positive momentum as upside surprises outweigh negative ones
“More than forty members of the FTSE 100 are reporting results or issuing a trading statement in the weeks beginning 27 July and 3 August, and analysts expect them to make more than £225 billion in annual profit in 2026 between them, or more than three-quarters of the index’s forecast aggregate earnings this year,” says AJ Bell investment director Russ Mould.
“Upside surprises from Unilever, Barclays and GSK, of varying degrees, in-line results from Croda and AstraZeneca and upgraded full-year guidance from Unilever make for a solid start to the frenetic earnings season and now seems a good time to take stock and have a good look at the health of UK corporate earnings.
“Earnings, and earnings momentum, matter. After all, price (or multiple) times by earnings (or profits) gives the index level, to slightly turn around the classic price-to-earnings (PE) valuation ratio.
“And, for all of the brickbats thrown at the FTSE 100, and the prevailing political and economic uncertainty in Britain, the good news for investors with exposure to UK equities on the earnings front is currently three-fold.
“Analysts believe that aggregate pre-tax income across the FTSE 100 will set a new record high in both 2026, and again in 2027. That at least helps to explain why the index stands within a fraction of the all-time high set in February, before the Middle Eastern war broke out.
Source: Company accounts, Marketscreener, analysts’ consensus forecasts
“The consensus forecast growth figures for underlying net income of 10% in 2026 and 8% in 2027 do not appear overly ambitious, given that the compound annual growth rate (CAGR) over the last twenty years has been 8.6%, a figure which looks credible in the context of trend GDP growth, average inflation rates and a little productivity and corporate profit margin expansion sprinkled on top. Granted the outlook here in the UK remains murky, but the FTSE 100 generates two-thirds of its profits overseas.
Source: Company accounts, Marketscreener, analysts’ consensus forecasts
“Positive earnings surprises are outpacing negative ones. So far in 2026, there have been 34 positive surprises or upgrades to guidance from FTSE 100 firms so far in 2026, compared to 21 negative surprises or downgrades. Across the whole UK market, earnings beats are outpacing misses by nearly two to one, at 242 plays 123.
Source: Company accounts, as of 28 July 2026
“As a result, analysts are upgrading their estimates. This is a nice change. Usually, they trim forecasts as a year develops and forecasts prove optimistic, but 2026 and 2027 are proving to be welcome exceptions to this rule, at least for now.
Source: Company accounts, Marketscreener, analysts’ consensus forecasts
“Again, this may seem surprising, given the opaque economic outlook here in the UK, and the wider global uncertainty provided by the wars in the Middle East and Ukraine, tariffs and volatility in oil and energy prices.
“It may therefore be helpful to stress test the earnings forecasts for UK plc and check out the quality as well as the quantity.
“The UK does offer an earnings stream that seems to be more sensitive to the economic cycle than say the USA, where technology is a much more dominant sector and one where analysts and investors alike seem confident in the prospect that artificial intelligence, or AI, and the spending associated with it will boost corporate profits on a secular basis this year, next year and beyond.
“If the US, on the face of it, offers secular growth, the UK offers cyclical growth. This can be seen in two ways.
“The ten biggest forecast earners in the FTSE 100 in 2026 are expected to generate 54% of expected pre-tax income between them. That list of ten includes four banks – HSBC, Barclays, Lloyds, and NatWest; two oil majors, BP, and Shell; and a miner, Rio Tinto. All are industries that can be seen as sensitive to the cycle.
“By contrast, just consumer goods specialist Unilever, tobacco company Imperial Brands and drug giant AstraZeneca operate in industries with at least some degree of insulation from swings in consumer and industrial confidence, within the ten biggest forecast earners for 2026.
Source: Company accounts, Marketscreener, analysts’ consensus forecasts
“The mix of the FTSE 100’s forecast aggregate profits is slanted more toward financials, oils, and miners. Analysts believe those three sectors will generate 62% of total FTSE 100 pre-tax income in 2026.
Source: Company accounts, Marketscreener, analysts’ consensus forecasts
“This may mean that the FTSE 100 offers some protection if oil prices run rampant, or inflation means investors seek exposure to commodities and ‘real assets,’ while the index also offers what could be useful exposure if central banks and politicians succeed in galvanising trend economic growth.
“Equally, a return to the low-growth, low-inflation, low-interest-rate sludge that characterised the 2010s would be more likely to favour the assets that did well then – long-duration assets such as bonds and secular growth industries like tech and biotech, which, if the past is any guide, would again favour the USA over the UK, for example, although investors must accept that the past offers no guarantees for the future.”
