The full update will be sent out later this weekend, probably Sunday night or Monday morning since travel is required to see clients this weekend, but one aspect of the IBES by Refinitiv data that caught the eye today was what is happening with Q3 and Q4 ’20 SP 500 sector growth estimates:
While Q4 ’19 earnings are important to look at “upside / downside” surprises and guidance, you have to take a longer view with the earnings data and keep an eye on revisions a few quarters out.
Note the Energy and Financial sectors for both Q3 and Q4 ’20.
That upward revision to the expected Energy sector earnings growth rate for Q4 ’20 is – ummm – material, from 15.8% to 39%.
The financial sector too is seeing positive revisions. The sector has been punk probably due to the flat yield curve since the Q4 ’19 rally.
I wonder if that’s a typo (i.e. the expected Energy growth rate jump).
Also, look at the upward revisions to the SP 500 EPS growth rate in general for the 3rd and 4th quarter: usually in this time frame, 9 – 12 months out, the growth rate revisions are usually lower.
Is this a call on the Presidential election ?
Let’s track it for a few weeks and see what happens to the growth rate(s) mentioned.
Anyway, just wanted to leave readers with something to ponder since the weekly update won’t be out on Saturday morning.
Thanks for reading.
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