According to ThomsonReuter’s weekly “This Week in Earnings” missive, the “forward 4-quarter” estimate for the SP 500 as of Friday, April 12th, 2013 was $115.14, down $0.11 from last week’s record high print of $115.25.<\/p>\n
The SP 500 forward earnings estimate is still above the previous record-high estimate of $113.88 estimate from the week of January 4th, 2013.<\/p>\n
The p.e ratio on the SP 500 as of Friday’s close was 13.8(x) the forward estimate.<\/p>\n
The “earnings yield” on the SP 500 (inverse of p.e. ratio) is still a lofty 7.25%.<\/p>\n
The year-over-year growth of the forward estimate has fallen to 5% from the recent high of 6.1% as of 3\/1\/13, and is a bit of yellow flag.<\/p>\n
We like to see the year-over-year growth rate of the forward estimate continue to grow, since that is what results in p.e expansion for the market.<\/p>\n
Full-year 2013 is still expecting 8.1% full year earnings growth for the SP 500, versus the 13.8(x) current p.e multiple.<\/p>\n
29 companies have reported q1 ’13 financial results, with the flood of earnings to start this week. The current consensus per the ThomsonReuters data is for +1.1% earnings growth and 1% revenue growth. Our own expectation is that earnings growth will be closer to 4% – 5%, when Wal-Mart (WMT) concludes earnings season in mid-May, while revenue growth could be a push given dollar strength.<\/p>\n
75 SP 500 companies are scheduled to report this week, and almost half of those will be Thursday before and after the bell. 23 Financials are scheduled to report this week, of the 75 on tap.<\/p>\n
Stat of the Week – expected q1 ’13 earnings and revenue growth: <\/strong><\/em><\/p>\n Here is how current consensus stands for each sector of the SP 500 in terms of expected q1 ’13 earnings (first column) and revenue growth (second column):<\/p>\n Financials +10.6%, +2.8%<\/p>\n Consumer discretionary +7.5%, +5.1%<\/p>\n Telco +5.8%, +1.6%<\/p>\n Consumer staples +3.3%, +1.6%<\/p>\n Basic Materials +2.1%, +0.1%<\/p>\n Utilities +1.2%, +6.7%<\/p>\n SP 500 +1.1%, +1.0%<\/p>\n Industrials -2.0%, +0.5%<\/p>\n Health Care -3.6%, +6.7%<\/p>\n Technology -3.8%, +4.5%<\/p>\n Energy -4.0%, -9.8%<\/p>\n ——————-<\/p>\n Commentary:<\/strong><\/em> The best sector performance in q1 ’13 was not necessarily the sectors with the best earnings growth, but the best revenue growth, such as Healthcare, and Utilities.\u00a0What is driving the Healthcare sector is not the large-cap pharma sector, which are some of our best performers, such as Pfizer (PFE), Merck\u00a0(MRK) and Amgen (AMGN), but (according to ThomsonReuters),\u00a0the revenue growth is coming from HealthCare Services and\u00a0Healthcare Managed Care. (Long MRK, PFE, AMGN)<\/p>\n My own opinion\u00a0is that Financials will continue to be a sector to put your money in 2013, as the recovery in housing and bank balance sheets, not to mention a Fed\u00a0that will\u00a0probably keep\u00a0rates low through the end of\u00a02013 (at least), will continue to aid and\u00a0drive sector earnings\u00a0growth.<\/p>\n Despite the pessimism around\u00a0SP 500 earnings in general, expect a decent quarter for q1 ’13, as results are released. We expect that q1 ’13 will see at least 4% – 5% when all is said and done by mid-May. The big surprise in Q1 ’13 was not the record high estimate of $113.88 on January 4th, 2013, but the fact that we saw less erosion in the forward estimate as the first quarter progressed from early January through March.<\/p>\n It should be getting harder and hard for Street analysts to be negative, as Corporate America has to push forward with investment and capex, despite the anti-business and\u00a0the “tax anything that moves or breathes” environment in Washington.<\/p>\n Our one and only market comment this week, will come from Bespoke, which noted that bullish sentiment in the AAII survey fell from 35% to 19.1% this week ! Amazing, given the breakout of the SP 500 above the March, 2000, and October, 2007 highs.<\/p>\n Some weeks, there just is not that much to say.<\/p>\n Thanks for reading and stopping by:<\/p>\n Trinity Asset Management, Inc. by:<\/p>\n Brian Gilmartin, CFA<\/p>\n Portfolio manager<\/p>\n 312-810-3480<\/p>\n","protected":false},"excerpt":{"rendered":" According to ThomsonReuter’s weekly “This Week in Earnings” missive, the “forward 4-quarter” estimate for the SP 500 as of Friday,…<\/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":[3,9],"tags":[],"class_list":["post-1548","post","type-post","status-publish","format-standard","hentry","category-earnings","category-sp-500"],"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\/1548","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=1548"}],"version-history":[{"count":10,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/1548\/revisions"}],"predecessor-version":[{"id":1565,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/1548\/revisions\/1565"}],"wp:attachment":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1548"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1548"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1548"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}