{"id":7903,"date":"2018-06-29T21:47:20","date_gmt":"2018-06-29T21:47:20","guid":{"rendered":"https:\/\/fundamentalis.com\/?p=7903"},"modified":"2018-06-29T21:47:20","modified_gmt":"2018-06-29T21:47:20","slug":"sp-500-weekly-earnings-update-a-quick-look-at-the-sp-500-forward-earnings-curve","status":"publish","type":"post","link":"https:\/\/fundamentalis.com\/?p=7903","title":{"rendered":"SP 500 Weekly Earnings Update: A Quick Look at the SP 500 Forward Earnings Curve"},"content":{"rendered":"<p>Next week, as we roll into the 3rd quarter of 2018, the &#8220;forward 4-quarter estimate&#8221; should jump to (approximately) $168 per share, which is the sum of Thomson Reuters IBES&#8217;s quarterly estimates for Q3 &#8217;18, through Q2 &#8217;19.<\/p>\n<p>Looking at the next two &#8220;forward 4-quarter estimates here is what they look like currently:<\/p>\n<ul>\n<li><em><strong>Q3 &#8217;18 &#8211; Q2 &#8217;19:<\/strong><\/em> $168 and change<\/li>\n<li><em><strong>Q4 &#8217;18 &#8211; Q3 &#8217;19:<\/strong><\/em> $172.50<\/li>\n<li><em><strong>Calendar 2019:<\/strong><\/em> $176.91<\/li>\n<\/ul>\n<p>(Source: Thomson Reuters IBES currently quarterly bottom up and annual estimates as of June 29, 1918.)<\/p>\n<p>Readers have to remember though, these estimates change daily with analyst&#8217;s updating their models, company preannouncements, (good and bad), and competitor news.<\/p>\n<p>It&#8217;s a fluid game, like investing itself.<\/p>\n<p>Readers can see the steady progression higher &#8211; the growth rate will eventually revert to 7% &#8211; 10% &#8211; once we lap the reduction in the corporate income tax, but SP 500 EPS estimates should work higher.<\/p>\n<p>Weekly update of the SP 500 metrics:<\/p>\n<ul>\n<li><em><strong>Fwd 4-qtr est:<\/strong><\/em>\u00a0 $164.16 vs last week&#8217;s $163.93 (the new estimate next Friday will be the above referenced $168 and change)<\/li>\n<li><em><strong>P.E ratio:<\/strong> <\/em>16.7x<\/li>\n<li><em><strong>PEG ratio:<\/strong><\/em> 0.76x<\/li>\n<li><em><strong>SP 500 earnings yield:<\/strong><\/em> +5.99%, vs last week&#8217;s 5.95%<\/li>\n<li><em><strong>Year-over-year growth of fwd estimate:<\/strong><\/em> +21.84% vs 21.68% from last week<\/li>\n<\/ul>\n<p>The PEG ratio has now been under 1.0x for 21 consecutive weeks per the internal spreadsheet. Readers may ask why the PEG is so low and thus why haven&#8217;t stocks done better (for most of the 1990&#8217;s the SP 500&#8217;s PEG was closer to 2.0x, versus today&#8217;s under 1.0x value) and my own guess is that &#8220;the market&#8221; sees today&#8217;s SP 500 earnings growth as a function of the corporate income tax rate reduction, which will eventually end after we roll into 2019, versus organic revenue growth like we saw in the 1990&#8217;s, particularly from large-cap Tech.<\/p>\n<p>That&#8217;s just an opinion.<\/p>\n<p>There will be a blog post every day this weekend since it is easier to write when the market is closed.<\/p>\n<p>Thanks for reading.<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Next week, as we roll into the 3rd quarter of 2018, the &#8220;forward 4-quarter estimate&#8221; should jump to (approximately) $168&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":[179,91],"tags":[],"class_list":["post-7903","post","type-post","status-publish","format-standard","hentry","category-forward-sp-500-earnings-curve","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\/7903","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=7903"}],"version-history":[{"count":1,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/7903\/revisions"}],"predecessor-version":[{"id":7904,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/7903\/revisions\/7904"}],"wp:attachment":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7903"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7903"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7903"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}