Long-time readers know this blog tracks the the year-over-year growth rate of the forward SP 500 estimate, which dollar estimate is given weekly by Thomson Reuters I/B/E/S, “This Week in Earnings”.
The year-over-year growth rate is my calculation for readers, and it really represents a kind-of “forward SP 500 earnings” curve. (That sounds fancy, and rather Wall Street’ish, but the forward 4-quarter estimate simply tracks the dollar changes in the SP 500 earnings estimate over the next 4 quarters, which is currently Q1 ’17 – Q4 ’17.)
Here is the this week’s data:
- Forward 4-quarter SP 500 earnings estimate: $132.91 down slightly from last week’s $132.93
- P.E ratio: 17.3(x)
- PEG ratio: 2.16(x)
- SP 500 earnings yield: 5.79% down from last week’s 5.85%
- Year-over-year growth rate of the forward estimate: +8%, up from last week’s +6.75%.
Here is the trend in the y/y growth rate of the SP 500 forward estimate, a statistic all but ignored by the mainstream financial media:
- 1/27/17: +8% ($132.91)
- 12/30/16: +5.03% ($128.57)
- 11/25/16: +4.03% ($128.56)
- 10/28/16: +3.74% ($128.97)
- 9/30/16: -1.18% ($125.09)
This blog has been tracking the forward estimate and its year-over-year growth rate since the year 2000. We’ve just finished a 24-month period from late 2014 to late 2016, where the y/y growth rate fell from the 9% range, to a low of -3% in early 2016, all due to the Energy sector drag.
Personally I’d love to see y/t growth rate in the forward estimate of 10% – that will be the highest “expected” growth rate in a very long time. The last time the SP 500 earnings grew 15%, was 2011, a year when the SP 500 suffered a 20% correction from May, 2011 through early October, 2011.
What is truly interesting about the data is that – even prior to the US Presidential election – the SP 500 forward earnings estimate was starting to rise rapidly.
There are several earnings-related articles in the pipeline, but year-end client lunches, dinners, meetings, etc. have kept the calendar full and the writing to a minimum.
Look for another article tomorrow.
Thanks for reading…