{"id":12011,"date":"2021-09-17T15:01:08","date_gmt":"2021-09-17T21:01:08","guid":{"rendered":"https:\/\/fundamentalis.com\/?p=12011"},"modified":"2021-09-17T15:01:08","modified_gmt":"2021-09-17T21:01:08","slug":"a-quick-look-at-2022-and-what-consensus-estimates-were-one-year-ago","status":"publish","type":"post","link":"https:\/\/fundamentalis.com\/?p=12011","title":{"rendered":"A Quick Look at 2022 and What Consensus Estimates Were One Year Ago"},"content":{"rendered":"

On 9\/18\/20, the consensus year-over-year EPS growth estimate for Q2 ’21 was 43.5%. The actual growth rate with just two weeks left in the quarter is – as of today – 95.5%.<\/p>\n

The expected y.y revenue growth rate for Q2 ’21 on 9\/18\/20 was 12.6%, but that same number today is 25%, with two weeks left in Q2 ’21. (For all practical purposes assume that Q2 ’21 won’t change since companies reporting in September typically have August ’21 quarter-end.)<\/p>\n

Looking at the inflection point, when Q4 ’20 earnings started in January ’21, the Q2 ’21 growth rates started to accelerate. and the numbers accelerated even faster starting on February 1 ’21.<\/p>\n

The reason for pointing this out is that sell-side consensus became even more tentative around the pandemic and they dramatically underestimated the actual strength of the SP 500 results the last 4 – 5 quarters.<\/p>\n

It will be interesting to see how 2022 SP 500 EPS and revenue growth rate revisions change with Q3 ’21 earnings starting early October ’21.<\/p>\n

How does 2022 estimated quarterly growth rates look today ?<\/strong><\/em><\/p>\n

\"\"<\/a><\/p>\n

This data from IBES by Refinitiv from the “Earnings Scorecard” shows the progression in expected 2022 SP 500 EPS and revenue growth rates by quarter since late April ’21.<\/p>\n

Next year will likely see more “normal” EPS and revenue growth rates but as readers can see the estimated growth rates are still trending higher.<\/p>\n

That’s a good sign.<\/p>\n

It doesn’t mean readers should be bullish or bearish: in 1994, SP 500 EPS grew 20% y\/y and the SP 500 returned 1% on the year thanks to 6 fed funds rate hikes by the Fed and higher interest rates, across the yield curve.<\/p>\n

But given the old saying, “the fastest man doesn’t always win the race, but it’s not a bad way to bet”, the positive revisions are comforting to see for the bulls.<\/p>\n

Capital markets and conditions change rapidly these days. Read everything with great skepticism.<\/p>\n

Thanks for reading.<\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

On 9\/18\/20, the consensus year-over-year EPS growth estimate for Q2 ’21 was 43.5%. The actual growth rate with just two…<\/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":[269],"tags":[],"class_list":["post-12011","post","type-post","status-publish","format-standard","hentry","category-269"],"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\/12011","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=12011"}],"version-history":[{"count":3,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/12011\/revisions"}],"predecessor-version":[{"id":12015,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/12011\/revisions\/12015"}],"wp:attachment":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=12011"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=12011"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=12011"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}