{"id":15899,"date":"2024-05-10T11:18:56","date_gmt":"2024-05-10T17:18:56","guid":{"rendered":"https:\/\/fundamentalis.com\/?p=15899"},"modified":"2024-05-10T11:18:56","modified_gmt":"2024-05-10T17:18:56","slug":"sp-500-earnings-which-sectors-have-shown-improved-growth-rates-for-2024","status":"publish","type":"post","link":"https:\/\/fundamentalis.com\/?p=15899","title":{"rendered":"SP 500 Earnings: Which Sectors Have Shown Improved Growth Rates for 2024 ?"},"content":{"rendered":"<p>A lot of the social media and CNBC crowd like to work with quarterly earnings, which is fine, but I&#8217;ve always thought that it was too narrow a field: one thing learned doing this weekend post for years is to look at quarterly results, but watch how full-year, calendar, &#8220;expected&#8221; sector growth rates change after earnings news.<\/p>\n<p>First though, after bottoming on April 12 &#8217;24, here&#8217;s how the expected Q1 &#8217;24 SP 500 EPS growth rate has changed since then:<\/p>\n<ul>\n<li><em><strong>5\/10\/24:<\/strong><\/em> +7.4%<\/li>\n<li><em><strong>5\/3\/24:<\/strong><\/em> +7.1%<\/li>\n<li><em><strong>4\/26\/24:<\/strong><\/em> +5.6%<\/li>\n<li><em><strong>4\/19\/24:<\/strong><\/em> +2.9%<\/li>\n<li><em><strong>4\/12\/24:<\/strong><\/em> +2.7%<\/li>\n<\/ul>\n<p>Q4 &#8217;23 ended with a +10.1% growth rate for SP 500 EPS, so it&#8217;s possible we could get to 10% in Q1 &#8217;24, but the fact is that SP 500 earnings are pretty healthy regardless.<\/p>\n<p>SP 500 data:<\/p>\n<ul>\n<li>The forward 4-quarter estimate slipped this week to $252.99 from $253.25.<\/li>\n<li>The PE on the forward estimate is 20.6 this week vs 20.25 last week.<\/li>\n<li>The SP 500 &#8220;earnings yield is 4.85% this week versus 4.94% last week.<\/li>\n<li>450 SP 500 companies have reported for Q1 &#8217;24 and the &#8220;upside surprise&#8221; is still at 8.3%, 200 bp&#8217;s higher than Q4 &#8217;23&#8217;s, +6.3%.<\/li>\n<\/ul>\n<p>Which sectors have shown improved growth rates for 2024 ?<\/p>\n<p><a href=\"https:\/\/fundamentalis.com\/wp-content\/uploads\/2024\/05\/SP500EPSexpgrowthratesbysector51024.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-medium wp-image-15900\" src=\"https:\/\/fundamentalis.com\/wp-content\/uploads\/2024\/05\/SP500EPSexpgrowthratesbysector51024-300x44.png\" alt=\"\" width=\"300\" height=\"44\" srcset=\"https:\/\/fundamentalis.com\/wp-content\/uploads\/2024\/05\/SP500EPSexpgrowthratesbysector51024-300x44.png 300w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2024\/05\/SP500EPSexpgrowthratesbysector51024-1024x152.png 1024w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2024\/05\/SP500EPSexpgrowthratesbysector51024-150x22.png 150w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2024\/05\/SP500EPSexpgrowthratesbysector51024-768x114.png 768w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2024\/05\/SP500EPSexpgrowthratesbysector51024-1536x227.png 1536w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2024\/05\/SP500EPSexpgrowthratesbysector51024-1600x237.png 1600w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2024\/05\/SP500EPSexpgrowthratesbysector51024.png 1695w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><\/p>\n<p>The highlighted sectors of consumer discretionary, financial services and communication services are all seeing higher expected growth rates since late December &#8217;23 and then again since April 1 &#8217;24.<\/p>\n<p>Financials have been performing very well. Credit losses are lower, and the regulatory issues seemed to have eased.<\/p>\n<p>Technology has lost some of it&#8217;s relative strength in terms of the stock market, so the lack of any improvement in the &#8220;tech sector&#8221; expected growth rate for 2024, may be one reason. Nvidia (NVDA) reports 5\/22, or a week from next Wednesday and semi&#8217;s are leading the AI charge, so let&#8217;s see how the tech sector expected growth rate changes after May 22, &#8217;24.<\/p>\n<p>The sharpest negative revisions are only in energy (but from late December &#8217;23, and in fact has improved since early April &#8217;24), and health care.<\/p>\n<p>Health care is expected to bounce back in &#8217;25 (not shown).<\/p>\n<p>Here&#8217;s one final data point that&#8217;s interesting: expected 2025 SP 500 EPS<\/p>\n<p><a href=\"https:\/\/fundamentalis.com\/wp-content\/uploads\/2024\/05\/SP500EPSexpected2025EPSprogression51024.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-medium wp-image-15904\" src=\"https:\/\/fundamentalis.com\/wp-content\/uploads\/2024\/05\/SP500EPSexpected2025EPSprogression51024-300x19.png\" alt=\"\" width=\"300\" height=\"19\" srcset=\"https:\/\/fundamentalis.com\/wp-content\/uploads\/2024\/05\/SP500EPSexpected2025EPSprogression51024-300x19.png 300w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2024\/05\/SP500EPSexpected2025EPSprogression51024-1024x66.png 1024w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2024\/05\/SP500EPSexpected2025EPSprogression51024-150x10.png 150w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2024\/05\/SP500EPSexpected2025EPSprogression51024-768x49.png 768w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2024\/05\/SP500EPSexpected2025EPSprogression51024-1536x98.png 1536w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2024\/05\/SP500EPSexpected2025EPSprogression51024-1600x102.png 1600w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2024\/05\/SP500EPSexpected2025EPSprogression51024.png 1703w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><\/p>\n<p>Note (click on the spreadsheet) how the expected 2025 EPS figure of $278.12 (as of this week), has added $2 since late March &#8217;24 and $4 since the start of the year.<\/p>\n<p>The pattern is usually the opposite: there is usually a mild downward progression.<\/p>\n<p>None of this is advice or a recommendation. Past performance is no guarantee of future results. Investing can involve loss of principal even for short time horizons. All EPS and revenue data sourced within is from LSEG.com.<\/p>\n<p><em><strong>Summary \/ conclusion:<\/strong><\/em> Two giant retailers report this coming week &#8211; Home Depot (HD) and Walmart (WMT) &#8211; as well as Cisco Systems (CSCO) which is scheduled to report Wednesday, May 15, &#8217;24.<\/p>\n<p>SP 500 earnings continue to reflect a positive business environment for SP 500 companies. Even the 2026 SP 500 EPS estimate has been revised higher from $300 to $312 in the last 6 weeks. Eventually something will change the trend. It&#8217;s been remarkable how strong the US economy remains, at least reflected in SP 500 earnings.<\/p>\n<p>Nothing&#8217;s really changed. It&#8217;s been a remarkable run of solid economic data.<\/p>\n<p>Thanks for reading.<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A lot of the social media and CNBC crowd like to work with quarterly earnings, which is fine, but I&#8217;ve&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":[105,4],"tags":[],"class_list":["post-15899","post","type-post","status-publish","format-standard","hentry","category-home-depot-hd","category-wmt"],"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\/15899","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=15899"}],"version-history":[{"count":7,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/15899\/revisions"}],"predecessor-version":[{"id":15908,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/15899\/revisions\/15908"}],"wp:attachment":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15899"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15899"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15899"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}