Q2 ’17 SP 500 Earnings Will Likely See at Least 10% – 12% Y/Y Growth

Thomson Reuters Data (by the numbers): (Source: This Week in Earnings, dated 6/9/17)

  • Fwd 4-qtr estimate: $134.82 vs $134.82 from last week
  • P.E ratio: 18(x)
  • PEG ratio: 1.93(x)
  • SP 500 earnings yield: 5.54% vs. 5.53% last week
  • Year-over-year growth of the forward estimate: +9.35% vs last week’s 9.36%

Over the next few weeks we’ll start to hear from a number of companies with May ’17 quarter end, like Nike (NKE), Oracle (ORCL), FedEx Corp (FDX), etc. (Long all 3 in various weights).

My guess at this juncture just looking from the Q2 ’17 Thomson data, is that by mid-August ’17, Q2 ’17 earnings growth for the SP 500 should be north of 10% – 12%, versus the 8.3% expected currently.

Q2 ’16 was still weak thanks to the commodity price pressure and the weak bank earnings from last year, so the easier comp will make Q2 ’17 growth look that much better.

Factset supports this conclusion with this Q2 ’17 earnings analysis published Friday, June 9 ’17. (https://insight.factset.com/earningsinsight_06.09.17)

Factset’s bar graph notes which sectors are driving the upside earnings surprises. Note this relative to the Friday, June 9th market action.

Thanks for reading.

 

 

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