“Forward 4-Quarter” SP 500 EPS Growth Rate Over 10% (Finally)

The expected year-over-year growth rate of the SP 500’s “forward -4-quarter” EPS finally moved over 10%, the first print over 10% since – well – quite a while.

A lot of folks are talking about the “tough compares” for the SP 500 going forward after lapping the easy Energy-depressed earnings of Q1 and 2 ’16.

That expected forward growth rate indicates the future still looks good.

If you are wondering if the forward growth rate is any kind of a leading indicator, we wrote about that here last week.

The call on the Financial sector on September 9th, looks pretty good. Financial have rallied sharply since the big banks and brokers pre-announced lousy 3rd quarter trading revenue.

Clients remain overweight Technology and Financials and that continues to look good for Q4 ’17.

Thomson Reuters I/B/E/S earnings data (by the numbers): 

  • Fwd 4-qtr estimate: $137.62
  • P.E ratio: 18(x)
  • PEG ratio: 1.83(x)
  • SP 500 earnings yield: 5.46%
  • Year-over-year growth of the forward estimate: +10.02% which I think is the highest y/y expectation since 2009. It is definitely the highest print in the last few years.

Taking the last Friday of each month this year, and calculating the expected forward SP 500 EPS growth rate, here is the chronology:

  • 9/28/17: +10.02%
  • 8/25/17: +9.95%
  • 7/28/17: +9.21%
  • 6/30/17: +9.05%
  • 5/26/17:+9.45%
  • 4/28/17: +4.21%
  • 3/31/17: +6.06%
  • 2/24/17: +8.41%
  • 1/27/217: +8.00%

The tale of the “forward expectations” tape.

Thanks for reading.

 

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