{"id":7600,"date":"2018-03-10T00:56:48","date_gmt":"2018-03-10T00:56:48","guid":{"rendered":"https:\/\/fundamentalis.com\/?p=7600"},"modified":"2018-03-10T00:56:48","modified_gmt":"2018-03-10T00:56:48","slug":"q1-18-earnings-start-in-a-month-how-have-the-estimates-changed","status":"publish","type":"post","link":"https:\/\/fundamentalis.com\/?p=7600","title":{"rendered":"Q1 &#8217;18 Earnings Start in a Month &#8211; How have the Estimates Changed ?"},"content":{"rendered":"<p>Around April 10th we should start to see the very start of Q1 &#8217;18 earnings, and typically the big banks start the ball rolling, or as Alan Abelson&#8217;s Barron&#8217;s used to say throughout the 1990&#8217;s &#8220;companies will step into the confessional&#8221;. Over the three weeks of April 10th or so till end end of the month, roughly 2\/3rd&#8217;s of the SP 500 will report numbers.<\/p>\n<p>Here is how estimates have changed the last 8 &#8211; 9 weeks:<\/p>\n<ul>\n<li><em><strong>Cons DIsc:<\/strong><\/em> +9% today vs 4.8% as of Jan 1 &#8217;18<\/li>\n<li><em><strong>Cons Spls:<\/strong><\/em> +9.5% today vs 9% as of Jan 1 &#8217;18<\/li>\n<li><em><strong>Energy:<\/strong><\/em> +74.7% today, vs 50.3% as of Jan 1 &#8217;18<\/li>\n<li><em><strong>Fincl&#8217;s:<\/strong><\/em> +24.3% vs 12.3% as of Jan 1 &#8217;18:<\/li>\n<li><em><strong>Hlth Care:<\/strong> <\/em>+10.4% vs +5.6% as of Jan 1 &#8217;18<\/li>\n<li><em><strong>Industrials:<\/strong><\/em> +14.3% vs 9.8% as of Jan 1 &#8217;18<\/li>\n<li><em><strong>Basic Mat:<\/strong><\/em> +27.5% vs 21.6% as of Jan 1 &#8217;18<\/li>\n<li><em><strong>Real Estate:<\/strong><\/em> +3.2%, vs +4.8% as of Jan 1 &#8217;18<\/li>\n<li><em><strong>Technology:<\/strong><\/em> +22.3% vs 19.7% as of Jan 1 &#8217;18<\/li>\n<li><em><strong>Telecom:<\/strong><\/em> +13.2% vs -1.1% as of Jan 1 &#8217;18<\/li>\n<li><em><strong>Utilities:<\/strong><\/em> +9.7% vs +8.1% as of Jan 1 &#8217;18<\/li>\n<li><em><strong>SP 500:<\/strong><\/em> +18.1% vs 12.2% as of Jan 1 &#8217;18<\/li>\n<\/ul>\n<p>After Energy, Financials are expecting the strongest rate of growth for Q1 &#8217;18 and growth estimates have doubled in the last 9 weeks. Schwab, CME, JP Morgan (JPM), KRE (regional bank ETF) hit all-time-highs today while the XLF did not, held back by Wells Fargo (none). (Long all the rest).<\/p>\n<p>Consumer Discretionary at least the XLY ETF, has Amazon as 21% of its market cap and Netflix as another 5% so if you think you might be diversified away from Tech owning Discretionary, you just own the other half of FANG.<\/p>\n<p>Real Estate is the only sector to see current Q1 &#8217;18 earnings growth estimates as of March 9, 2018, below that expected Jan 1 &#8217;18.<\/p>\n<p>Technology revisions are still somewhat muted &#8211; yes higher over the last 9 weeks, but much smaller than other sectors. Too much good news in Tech ?<\/p>\n<p><em><strong>Conclusion:<\/strong>\u00a0<\/em>The trading action in the<em>\u00a0<\/em>Financial sector today was encouraging. The weighting was lifted for clients in late &#8217;17 and early &#8217;18 as we&#8217;ve written about here. It isn&#8217;t just interest rates either. I think Congress is taking the right approach to bank deregulation and it seems to be bipartisan. No one wants a repeat of 2008, but a big chunk of the US economy can&#8217;t be another version of regulated utilities either.<\/p>\n<p><em><strong>Here are the weekly SP 500 numbers:<\/strong><\/em> (Courtesy Thomson Reuters I\/B\/E\/S &#8220;This Week in Earnings&#8221;)<\/p>\n<ul>\n<li><em><strong>Fwd 4-qtr estimate:<\/strong><\/em> $158.23 up $0.02 from last week&#8217;s $158.21<\/li>\n<li><em><strong>P.E ratio:<\/strong> <\/em>17.6x<\/li>\n<li><em><strong>PEG ratio:<\/strong><\/em> 0.85x<\/li>\n<li><em><strong>SP 500 earnings yield:<\/strong><\/em> 5.69%<\/li>\n<li><em><strong>Year-over-year growth of fwd estimate:<\/strong> <\/em>20.72% vs last week&#8217;s 20.57%<\/li>\n<\/ul>\n<p>Tariff talk and the end of earnings season might result in small increases to the forward estimate for a while. Still, the earnings data is solid for sure. Im amazed that we could see $160 as a forward estimate before the<br \/>\n&#8220;quarterly bump&#8221; hits us for Q2 18 through Q1 &#8217;19, the first Friday of April.<\/p>\n<p>Thanks for reading&#8230;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Around April 10th we should start to see the very start of Q1 &#8217;18 earnings, and typically the big banks&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":[91],"tags":[],"class_list":["post-7600","post","type-post","status-publish","format-standard","hentry","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\/7600","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=7600"}],"version-history":[{"count":1,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/7600\/revisions"}],"predecessor-version":[{"id":7601,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/7600\/revisions\/7601"}],"wp:attachment":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7600"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7600"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7600"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}