{"id":12016,"date":"2021-09-19T14:32:08","date_gmt":"2021-09-19T20:32:08","guid":{"rendered":"https:\/\/fundamentalis.com\/?p=12016"},"modified":"2021-09-19T14:32:08","modified_gmt":"2021-09-19T20:32:08","slug":"updating-sp-500-numbers-market-bubble-conditions-dont-appear-present","status":"publish","type":"post","link":"https:\/\/fundamentalis.com\/?p=12016","title":{"rendered":"Updating SP 500 Numbers \/ Market Bubble Conditions Don’t Appear Present"},"content":{"rendered":"

Friday night’s post<\/a> was a chance to show readers how much SP 500 revenue and EPS “expected” growth estimates have changed over the last 52 weeks.<\/p>\n

If readers would have been shown the complete week-to-week data, you’d see how expected growth rates can change over the course of a year for forward estimates.<\/p>\n

However, thanks to the pandemic, sell-side consensus has shown the last 5 quarters that analysts are waiting until they are right on top of the quarter or seeing the actual prints and management commentary before boosting their EPS and revenue estimates.<\/p>\n

There is no question that the forward EPS and revenue estimates for the SP 500 are the Street’s best guess as to what the next 12 – 15 months will look like (and does look like) from a valuation perspective. Combine that with expected “sector” growth rates for EPS and revenue and we can compile an educated guess as to risk vs reward.<\/p>\n

Hence watching the revisions (even small revisions) to expected growth rates is very helpful.<\/p>\n

Looking at the 2022 “expected” growth rates for SP 500 EPS and revenue particularly since August ’21, readers are still seeing upward revisions.<\/p>\n

Starting with Q3 and Q4 ’21 earnings reports and then 2002, the SP 500 should return to more “normal” expected growth rates for SP 500 EPS and revenue as we move beyond the Covid-19 and pandemic years of 2020 and 2021.<\/p>\n

SP 500 data:\u00a0<\/strong><\/em><\/p>\n