{"id":11917,"date":"2021-08-20T14:45:40","date_gmt":"2021-08-20T20:45:40","guid":{"rendered":"https:\/\/fundamentalis.com\/?p=11917"},"modified":"2021-08-20T14:45:40","modified_gmt":"2021-08-20T20:45:40","slug":"sp-500-earnings-q3-and-q4-21-revenue-revisions-look-encouraging","status":"publish","type":"post","link":"https:\/\/fundamentalis.com\/?p=11917","title":{"rendered":"SP 500 Earnings: Q3 and Q4 &#8217;21 Revenue Revisions Look Encouraging"},"content":{"rendered":"<p><a href=\"https:\/\/fundamentalis.com\/wp-content\/uploads\/2021\/08\/Sp5002021sectorgrorates82021.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-medium wp-image-11918\" src=\"https:\/\/fundamentalis.com\/wp-content\/uploads\/2021\/08\/Sp5002021sectorgrorates82021-300x92.png\" alt=\"\" width=\"300\" height=\"92\" srcset=\"https:\/\/fundamentalis.com\/wp-content\/uploads\/2021\/08\/Sp5002021sectorgrorates82021-300x92.png 300w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2021\/08\/Sp5002021sectorgrorates82021-150x46.png 150w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2021\/08\/Sp5002021sectorgrorates82021-768x236.png 768w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2021\/08\/Sp5002021sectorgrorates82021.png 792w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><\/p>\n<p>This table is from IBES data by Refinitiv&#8217;s weekly &#8220;This Week in Earnings&#8221;, just with a longer perspective.<\/p>\n<p>Every single SP 500 sector&#8217;s expected 2021 growth rate is higher since July 2, 2021.<\/p>\n<p>The SP 500 &#8211; as of today &#8211; is expected to see 45% EPS growth this year, and that could easily be up over 50% when Q4 &#8217;21 earnings start rolling in.<\/p>\n<p>2021 is turning out to be a remarkable year earnings wise.<\/p>\n<p><em><strong>Q3 &#8217;21 and Q4 &#8217;21:\u00a0<\/strong><\/em><\/p>\n<p><a href=\"https:\/\/fundamentalis.com\/wp-content\/uploads\/2021\/08\/SP500q3q4epsrevrevisions82021.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-medium wp-image-11920\" src=\"https:\/\/fundamentalis.com\/wp-content\/uploads\/2021\/08\/SP500q3q4epsrevrevisions82021-261x300.png\" alt=\"\" width=\"261\" height=\"300\" srcset=\"https:\/\/fundamentalis.com\/wp-content\/uploads\/2021\/08\/SP500q3q4epsrevrevisions82021-261x300.png 261w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2021\/08\/SP500q3q4epsrevrevisions82021-130x150.png 130w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2021\/08\/SP500q3q4epsrevrevisions82021.png 553w\" sizes=\"auto, (max-width: 261px) 100vw, 261px\" \/><\/a><\/p>\n<p>With Q2 &#8217;21&#8217;s financial results almost entirely in the books now, attention is turning to Q3 and Q4 &#8217;21 and the data in the above table continues to indicate higher expected growth rate week-after-week.<\/p>\n<p>Sell-side analysts have grossly underestimated the revenue and EPS strength of the SP 500 since the pandemic started. Hence, analyzing the near-term earnings data should be the bread crumbs that direct us on the investing path.<\/p>\n<p>Q3 and Q4 &#8217;21 EPS and revenue revisions continue to portend positively.<\/p>\n<p><em><strong>Rate of change:\u00a0<\/strong><\/em><\/p>\n<p><a href=\"https:\/\/fundamentalis.com\/wp-content\/uploads\/2021\/08\/SP500epsrateofchange82021.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-medium wp-image-11921\" src=\"https:\/\/fundamentalis.com\/wp-content\/uploads\/2021\/08\/SP500epsrateofchange82021-294x300.png\" alt=\"\" width=\"294\" height=\"300\" srcset=\"https:\/\/fundamentalis.com\/wp-content\/uploads\/2021\/08\/SP500epsrateofchange82021-294x300.png 294w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2021\/08\/SP500epsrateofchange82021-147x150.png 147w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2021\/08\/SP500epsrateofchange82021.png 750w\" sizes=\"auto, (max-width: 294px) 100vw, 294px\" \/><\/a><\/p>\n<p>It&#8217;s a struggle to get the SP 500 forward EPS curve data on one page, but note the 12-week rate of change.<\/p>\n<p>The week of July 30, 2021, was a big week for Tech sector earnings so let&#8217;s see if the 12-week rate of change can continue into September &#8217;21.<\/p>\n<p>Next week and the pre-Labor Day week will be pretty quiet.<\/p>\n<p><em><strong>SP 500 data:<\/strong><\/em><\/p>\n<ul>\n<li>The forward 4-quarter estimate rose to $206.32 this week from $205.89 last week. No doubt Walmart&#8217;s earnings report helped.<\/li>\n<li>The PE ratio is now 21.5x<\/li>\n<li>The SP 500 &#8220;earnings yield&#8221; is back to 4.66%, bumping against it&#8217;s highest levels since last May &#8217;20.<\/li>\n<li>The Q2 &#8217;21 &#8220;bottom-up&#8221; estimate is $52.57 this week, versus $52.26 last week, up from $41.99 on April &#8216;1, &#8217;21.<\/li>\n<li>The Q3 &#8217;21 bottom-up EPS estimate today is $49.18 up from $45.63 last April &#8217;21.<\/li>\n<\/ul>\n<p><em><strong>Summary \/ conclusion: <\/strong><\/em>The problem with tracking SP 500 EPS data is that recessions are not always your typical &#8220;business-cycle&#8221; recession, with the pandemic being a perfect example. The SP 500 EPS data wouldn&#8217;t predict a pandemic, but it did get in front of the Q4 &#8217;18 correction in the SP 500 since the SP 500 data peaked the exact week the SP 500 peaked.<\/p>\n<p>Tracking the above data using IBES data by Refinitiv, can get pretty boring but it gives readers (me) a feel for trends both in sectors and the overall SP 500.<\/p>\n<p>Q3 and Q4 &#8217;21 continue to see positive revisions just like Q3 and Q4 &#8217;20 and every quarter since the Fed and Congressional stimulus. With the financial crack wear off ? Absolutely, but with Treasury yields low and corporate credit spreads so tight, &#8220;the song remains the same&#8221; as they say.<\/p>\n<p>The positive revenue revisions look particularly encouraging for Q3 and Q4 &#8217;21.<\/p>\n<p>This could all change in an instant so take it all with a grain of salt.<\/p>\n<p>Thanks for reading.<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>This table is from IBES data by Refinitiv&#8217;s weekly &#8220;This Week in Earnings&#8221;, just with a longer perspective. Every single&hellip;<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[91],"tags":[],"class_list":["post-11917","post","type-post","status-publish","format-standard","hentry","category-weekly-earnings-update"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/11917","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11917"}],"version-history":[{"count":4,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/11917\/revisions"}],"predecessor-version":[{"id":11924,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/11917\/revisions\/11924"}],"wp:attachment":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11917"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11917"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11917"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}