Too Soon to Look at 2020 SP 500 EPS Growth ?

We are just 7 months from the calendar rolling into 2020.

The first EPS estimate for 2020 was actually published by I/B/E/S by Refinitiv in early April ’18, but the sector growth rates don’t start to get tracked until the quarter falls within the “forward 4-quarter” estimate. Thus, for now, we only see sector growth rates for Q1 ’10, which is the last quarter of the Q2 ’19 – Q1 ’20 forward estimate.

Since April ’18, the 2020 estimate has fallen within a very tight $3 range, between $186 – $189.

The bottom-up estimate as of last Friday, May 24th, 2019  was $186.74.

Here are the actual and expected SP 500 EPS y/y growth rates for 2017 through 2021:

  • 2021: 10% (est)
  • 2020: 12% (est)
  • 2019: +3% (est)
  • 2018: +14% (organic growth rate per Factset, after excluding Tax Cuts & Job Act impact).
  • 2017: 12% (actual)

The 2020 SP 500 EPS growth has been remarkably consistent now for the last year. The China Tariff issue could definitely complicate that¬† but as of yet, there has been little impact on the overall SP 500 earnings growth yet. That’s a big qualifier though.

I do expect 2019 EPS to show stronger growth eventually than the 3% currently expected.

2020 bodes well (so far).

Thanks for reading.

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