{"id":7533,"date":"2018-02-02T23:55:40","date_gmt":"2018-02-02T23:55:40","guid":{"rendered":"https:\/\/fundamentalis.com\/?p=7533"},"modified":"2018-02-03T19:05:38","modified_gmt":"2018-02-03T19:05:38","slug":"2018-estimated-sp-500-earnings-growth-rises-to-18","status":"publish","type":"post","link":"https:\/\/fundamentalis.com\/?p=7533","title":{"rendered":"2018 Estimated SP 500 Earnings Growth Rises to 18%"},"content":{"rendered":"

Last week, this blog post<\/a> was shown in order for readers to get a sense for how fast SP 500 earnings were accelerating.<\/p>\n

With the Thomson Reuters data out this Friday, the 2018 “estimated” SP 500 earnings growth rate is now 17.7% (let’s say 18%) up from last week’s 16%.<\/p>\n

What’s more, with the drop in the key benchmark this week, the P.E on the SP 500 of 17.8(x) is now exactly 1x the market’s expected growth rate this year.<\/p>\n

On a P.E to growth basis (PEG), the SP 500 still looks reasonably valued.<\/p>\n

Another stat that jumped out from the Thomson Reuters I\/B\/E\/S report is that 80% of the SP 500 companies that have reported Q4 ’17 financial results so far, have beaten consensus REVENUE estimates. Normally just 60% beat on the top line estimate.<\/p>\n

That’s a big number, but retail is still to report through February ’18 so maybe that comes in a little.<\/p>\n

The SP 500 earnings yield actually jumped from 5.35% last week to 5.62% this week.<\/p>\n

What’s it all mean with the big market drop this week ?<\/p>\n

The 10-year Treasury yield has risen from 2,40% on 12.31.17 to 2.85 as of the market close today, 2.2.18.<\/p>\n

Remember in 1994, the SP 500 earnings grew 20% while the benchmark returned 1% that year on the back of 6 Greenspan-led fed funds rate hikes.<\/p>\n

This correction was badly needed – stay focused on the long game of SP 500 earnings growth.<\/p>\n

Here are expected SP 500 earnings growth rates for the next 3 years:<\/p>\n