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.