{"id":12592,"date":"2022-02-11T17:05:18","date_gmt":"2022-02-11T23:05:18","guid":{"rendered":"https:\/\/fundamentalis.com\/?p=12592"},"modified":"2022-02-11T17:05:18","modified_gmt":"2022-02-11T23:05:18","slug":"sp-500-earnings-revisions-turn-weaker-expected-2022-eps-growth-still-rangebound","status":"publish","type":"post","link":"https:\/\/fundamentalis.com\/?p=12592","title":{"rendered":"SP 500 Earnings: Revisions Turn Weaker, Expected 2022 EPS Growth Still Rangebound"},"content":{"rendered":"<p><a href=\"https:\/\/fundamentalis.com\/wp-content\/uploads\/2022\/02\/Sp500EPSrevisions21122.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-medium wp-image-12593\" src=\"https:\/\/fundamentalis.com\/wp-content\/uploads\/2022\/02\/Sp500EPSrevisions21122-300x191.png\" alt=\"\" width=\"300\" height=\"191\" srcset=\"https:\/\/fundamentalis.com\/wp-content\/uploads\/2022\/02\/Sp500EPSrevisions21122-300x191.png 300w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2022\/02\/Sp500EPSrevisions21122-1024x652.png 1024w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2022\/02\/Sp500EPSrevisions21122-150x96.png 150w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2022\/02\/Sp500EPSrevisions21122-768x489.png 768w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2022\/02\/Sp500EPSrevisions21122.png 1140w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><\/p>\n<p>This table is from data courtesy of IBRES data by Refinitiv, which shows how SP 500 EPS &#8220;revisions&#8221; have softened since the 2nd and 3rd quarters of 2021 were reported.<\/p>\n<p>The bordered boxes on the spreadsheet show the July &#8217;21 and October &#8217;21 reporting periods for the SP 500 components and readers can see the trend in &#8220;Up revisions&#8221; far outnumbering the down or negative revisions, until this current reporting period which has slid to 50% \/ 50%.<\/p>\n<p>It&#8217;s one data point but it&#8217;s worth noting.<\/p>\n<p><em><strong>SP 500 data:\u00a0<\/strong><\/em><\/p>\n<ul>\n<li>The forward 4-quarter estimate jumped to $225.15 this week vs $225.02 last week and $223.25 to start the year.<\/li>\n<li>The PE on the forward estimate is 19.6x versus last week&#8217;s 20x;<\/li>\n<li>The SP 500 earnings yield jumped to 5.09% this week vs 5% last week. The high water mark for the first 6 weeks of 2022 is 5.09%;<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><a href=\"https:\/\/fundamentalis.com\/wp-content\/uploads\/2022\/02\/SP5002022EPSbottomup21122.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-medium wp-image-12594\" src=\"https:\/\/fundamentalis.com\/wp-content\/uploads\/2022\/02\/SP5002022EPSbottomup21122-300x47.png\" alt=\"\" width=\"300\" height=\"47\" srcset=\"https:\/\/fundamentalis.com\/wp-content\/uploads\/2022\/02\/SP5002022EPSbottomup21122-300x47.png 300w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2022\/02\/SP5002022EPSbottomup21122-150x24.png 150w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2022\/02\/SP5002022EPSbottomup21122.png 730w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><\/p>\n<p>Here&#8217;s a snippet from our SP 500 earnings tracking spreadsheet: note how the 2022 full-year and quarterly bottom-up EPS estimates have changed very little since earnings season started.<\/p>\n<p>If analysts were reluctant to raise numbers during the roaring bull market from March, 2020 through December &#8217;21, think about their reluctance to raise numbers in front of higher fed funds rates and quantitative tightening.<\/p>\n<p><em><strong>We&#8217;ve seen &#8220;Ukraine&#8221; before:\u00a0<\/strong><\/em><\/p>\n<p><a href=\"https:\/\/fundamentalis.com\/wp-content\/uploads\/2022\/02\/SP500EPSrevisionsfromq11421122.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-medium wp-image-12595\" src=\"https:\/\/fundamentalis.com\/wp-content\/uploads\/2022\/02\/SP500EPSrevisionsfromq11421122-300x96.png\" alt=\"\" width=\"300\" height=\"96\" srcset=\"https:\/\/fundamentalis.com\/wp-content\/uploads\/2022\/02\/SP500EPSrevisionsfromq11421122-300x96.png 300w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2022\/02\/SP500EPSrevisionsfromq11421122-150x48.png 150w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2022\/02\/SP500EPSrevisionsfromq11421122-768x246.png 768w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2022\/02\/SP500EPSrevisionsfromq11421122.png 875w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><\/p>\n<p>This clip from our SP 500 EPS &#8220;revisions&#8221; spreadsheet shows us how analyst&#8217;s reacted in Q1 &#8217;14 when Putin invaded Ukraine or at least got the world to think that he was going to take an aggressive action towards Ukraine.<\/p>\n<p>For context, in 2013, the SP 500 rose 32% on the back of the Bernanke Taper Tantrum, interest rates rose sharply, but in Q1 &#8217;14, Venezuela devalued their currency and Ukraine became an issue for President Obama.<\/p>\n<p><a href=\"https:\/\/fundamentalis.com\/wp-content\/uploads\/2022\/02\/YchartsSP500returnQ114.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-medium wp-image-12597\" src=\"https:\/\/fundamentalis.com\/wp-content\/uploads\/2022\/02\/YchartsSP500returnQ114-300x189.png\" alt=\"\" width=\"300\" height=\"189\" srcset=\"https:\/\/fundamentalis.com\/wp-content\/uploads\/2022\/02\/YchartsSP500returnQ114-300x189.png 300w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2022\/02\/YchartsSP500returnQ114-1024x645.png 1024w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2022\/02\/YchartsSP500returnQ114-150x95.png 150w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2022\/02\/YchartsSP500returnQ114-768x484.png 768w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2022\/02\/YchartsSP500returnQ114.png 1144w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><\/p>\n<p>Ths Ycharts performance graph shows the action in the SP 500 for Q1 &#8217;14.<\/p>\n<p>The difference between early &#8217;22 and early &#8217;14 is the Fed today and the inflation worries. In January &#8217;14 in fact President Obama replaced Bernanke with Janet Yellen and this insured that interest rates wouldn&#8217;t be raised during his term. That&#8217;s definitely not the case today.<\/p>\n<p><em><strong>Summary \/ conclusion:<\/strong><\/em>\u00a0 SP 500 earnings look to be on track for the 8% &#8211; 10% EPS growth in 2022. The difference this year being a much more active Fed and tighter monetary policy. I have no no idea how to gauge Ukraine and what President will face or how NATO will react. Putin likes to bluff since it keeps the old USSR &#8220;nationalists&#8221; and Mother Russia fans appeased.<\/p>\n<p>Cisco (CSCO) and Walmart (WMT) both report this week and with Walmart&#8217;s report, the Q4 &#8217;21 earnings season will come to an unofficial close.<\/p>\n<p>Both Cisco and Walmart are &#8220;non-mo&#8221; stocks and have underperformed the SP 500 the last 12 years:<\/p>\n<p><a href=\"https:\/\/fundamentalis.com\/wp-content\/uploads\/2022\/02\/CSCOWMTvsSP50021122.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-medium wp-image-12599\" src=\"https:\/\/fundamentalis.com\/wp-content\/uploads\/2022\/02\/CSCOWMTvsSP50021122-300x217.png\" alt=\"\" width=\"300\" height=\"217\" srcset=\"https:\/\/fundamentalis.com\/wp-content\/uploads\/2022\/02\/CSCOWMTvsSP50021122-300x217.png 300w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2022\/02\/CSCOWMTvsSP50021122-1024x742.png 1024w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2022\/02\/CSCOWMTvsSP50021122-150x109.png 150w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2022\/02\/CSCOWMTvsSP50021122-768x557.png 768w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2022\/02\/CSCOWMTvsSP50021122.png 1148w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><\/p>\n<p>Source: Ycharts<\/p>\n<p>Cisco and Walmart have almost identical total returns since 1\/1\/2010.<\/p>\n<p>Thanks for reading.<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>This table is from data courtesy of IBRES data by Refinitiv, which shows how SP 500 EPS &#8220;revisions&#8221; have softened&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":[210,91],"tags":[],"class_list":["post-12592","post","type-post","status-publish","format-standard","hentry","category-sp-500-estimate-revision-data","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\/12592","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=12592"}],"version-history":[{"count":5,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/12592\/revisions"}],"predecessor-version":[{"id":12602,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/12592\/revisions\/12602"}],"wp:attachment":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=12592"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=12592"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=12592"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}