Per Thomson Reuter’s, “This Week in Earnings” the forward 4-quarter EPS estimate for the SP 500 fell $0.12 last week to $122.94.<\/p>\n
The p.e ratio on the forward estimate is now 15.9(x).<\/p>\n
The PEG ratio using the forward estimate is still 1.85(x), well below the 2.5(x) range in 2013.<\/p>\n
The earnings yield on the SP 500 is 6.31%, and continues to slide (naturally), as the SP 500 rises faster than earnings growth.<\/p>\n
Once again, the year-over-year growth rate of the forward estimate rose to 8.59% from last week’s 8.54%, for the seventh consecutive weekly increase.<\/p>\n
Over the last 7 weeks, that year-over-year growth rate has increased from 6.75% to 8.59%.<\/p>\n
Not too bad. Ironically, the last 7 weeks were retail and energy and industrial names reporting within the SP 500.<\/p>\n
Analysis \/ Commentary:<\/strong> <\/em>From a bigger picture perspective, the following table shows the last 7 years earnings growth for the SP 500:<\/p>\n Readers can quickly see the 2007 – 2009 period, but readers can also quickly see the stability the last few years around the actual 6% – 7% growth rates, and the expected growth rates over the next three years. The 2014 – 2016 numbers are using “top-down” earnings estimates: if we calculate expected 2014 earnings growth using the current bottoms-up EPS estimate of $119.65, (versus the top-down estimate of $117.32), then 2014 expected growth is 9.1% – big difference.<\/p>\n The\u00a0important difference between top-down and bottoms-up is (importantly) analytical rigor: while top-down is often Strategist estimates, the bottoms-up estimate is comprised or a function of sector and company estimates, combined into one number.<\/p>\n If SP 500 earnings do grow 9% – 10% this year, and the p.e multiple on the SP 500 expands to 2(x) the growth rate or 18(x) – 20(x), there is more upside ahead to the market.<\/p>\n Our thought in late 2013, early 2014 was that we could see 10% earnings growth this year for the SP 500, but I’ve been flip-flopping worse than a politician. We’ll recap all of this in a separate article.<\/p>\n I still think we get another 5% – 10% market correction before October 1, which will have nothing to do with earnings.<\/p>\n That is our math (story) and I’m sticking to it…<\/p>\n Trinity Asset Management, Inc. by:<\/p>\n Brian Gilmartin, CFA<\/p>\n Portfolio manager<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Per Thomson Reuter’s, “This Week in Earnings” the forward 4-quarter EPS estimate for the SP 500 fell $0.12 last week…<\/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":[93,91],"tags":[],"class_list":["post-3756","post","type-post","status-publish","format-standard","hentry","category-sp-500-forecasts","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\/3756","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=3756"}],"version-history":[{"count":7,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/3756\/revisions"}],"predecessor-version":[{"id":3763,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/3756\/revisions\/3763"}],"wp:attachment":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3756"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3756"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3756"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n\n
\n 2016 – est<\/em><\/strong><\/td>\n 4%<\/em><\/strong><\/td>\n<\/tr>\n \n 2015 – est<\/em><\/strong><\/td>\n 8%<\/em><\/strong><\/td>\n<\/tr>\n \n 2014 – est<\/em><\/strong><\/td>\n 7%<\/em><\/strong><\/td>\n<\/tr>\n \n 2013 – actual<\/td>\n 6%<\/td>\n<\/tr>\n \n 2012 – actual<\/td>\n 6%<\/td>\n<\/tr>\n \n 2011 – actual<\/td>\n 15%<\/td>\n<\/tr>\n \n 2010 – actual<\/td>\n 40.26%<\/td>\n<\/tr>\n \n 2009 – actual<\/td>\n -7.13%<\/td>\n<\/tr>\n \n 2008 – actual<\/td>\n -23.09%<\/td>\n<\/tr>\n \n 2007 – actual<\/td>\n -3.47%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n