This weekend, the lack of any material change to SP 500 sector growth rates is puzzling, given that there is consistent positive revisions to forward SP 500 EPS estimates for 2021.
Note the 4-week and 12-week rate of change to the SP 500 forward EPS curve after SP 500 earnings this week:
The actual “rate of change” is accelerating.
This second table that readers typically see is the tracking of forward quarters SP 500 EPS and revenue growth rates. Q2 ’21 is going to be the toughest compare with 2020 so that quarter is being watched particularly closely and positive revisions are still being seen every week.
Summary / conclusion: The Super Bowl just started so this is the last thing I want to be doing. However it is interesting to compare the upward pressure on SP 500 EPS and revenue to expected stable sector growth rates for calendar 2021. At some point the two data sets you would think have to converge or move in tandem.
The big surprise in the pandemic is how badly the sell-side and the strategists missed the EPS and revenue “upside” in Q2, Q3 and Q4 ’20. These numbers have been monstrous beats.
Microsoft had 33 sell-side analysts tracking their quarter and the consensus was still light by $3 billion, i.e. $43 billion in revenue versus $40 billion.
Anyway, time for the game.
Be skeptical about everything you read.
Thanks for reading.