A surprising prediction for 2022 🤯

Already fat profit margins are expected to get fatter

Perhaps the most unexpected development of 2021 has been corporate America’s ability to widen its profit margins despite widespread inflationary pressures, including higher wages and the rising cost of goods.

Even in normal times, profit margins are difficult to maintain, as companies often lower prices in an effort to steal business from competitors. And with inflation rates continuing to heat up,¹ it’s particularly surprising to hear that analysts are predicting profit margins to continue higher in 2022.

According to data compiled by FactSet’s John Butters, analysts expect the net profit margin² for S&P 500 companies to climb to 12.8% in 2022, up from an estimated 12.6% in 2021.