Positing that the earnings estimates for the S&P 500 for 2022’s first quarter are “overly pessimistic,” strategists at JPMorgan Chase & Co. believe that Corporate America will easily surpass those forecasts, and that companies in the S&P 500 index will deliver an unexpected 4% to 5% on their margins, reports an article in Bloomberg.

While declines in two back-to-back quarters would normally indicate the start of an earnings recession, the JPMorgan team wrote that the first-quarter estimates wouldn’t be difficult for S&P 500 companies to overcome, especially since companies have stayed resilient even in the face of geopolitical tensions, rising interest rates, tightening monetary policy, and supply chain disruptions. In spite of all this, analysts have been elevating their original earnings-per-share forecasts for the remaining quarters of this year.

And indeed, 78% of the 89 S&P 500 companies that have announced their first-quarter earnings have bested their earnings estimates, according to Bloomberg. The JPMorgan team also predicts revenue growth to stay above trend between 8% to 10% for the rest of 2022. But, they warned that companies may start to push earnings estimates lower if input costs increase and cause lower net income margins. That would also slow down the current pace of buybacks—an incredible $1 trillion this year.

The JPMorgan analysts also noted that the investment bank has lowered its S&P 500 earnings-per-share outlook for 2022 from $235 to $230, which indicates 10% earnings-per-share growth year-over-year, the article pointed out.