{"id":9701,"date":"2020-01-04T01:51:09","date_gmt":"2020-01-04T01:51:09","guid":{"rendered":"https:\/\/fundamentalis.com\/?p=9701"},"modified":"2020-01-04T01:51:09","modified_gmt":"2020-01-04T01:51:09","slug":"sp-500-earnings-update-quarterly-bump-in-forward-estimate","status":"publish","type":"post","link":"https:\/\/fundamentalis.com\/?p=9701","title":{"rendered":"SP 500 Earnings Update: Quarterly Bump in Forward Estimate"},"content":{"rendered":"

The new “forward 4-quarter” estimate as we roll into the new January ’20 quarter is $176.74 versus last week’s $171.15.<\/p>\n

This happens every quarter and now for the next twelve weeks the $176.74 will gradually erode into the last week of March ’20 and then we’ll get another jump in early April ’20.<\/p>\n

This is what most retail investors miss about SP 500 earnings as a forward quarter is added and the back quarter falls off, the trend is inexorably higher.<\/p>\n

In early October ’19, the quarterly bump in the first week of October was from $170.58 to $175.49.<\/p>\n

\"\"<\/a>
Click to enhance \/ open \/ enlarge<\/figcaption><\/figure>\n

(Source IBES by Refinitiv)<\/p>\n

To be even geekier about it, look at Q4 ’19 earnings which will start to get reported and then Q1 ’20, which is flat with Q4 ’19.<\/p>\n

Q4 ’19 will end up about $42 per share by the end of March, ’20, but after Q1 ’20 note the sudden ramp in the last three quarters of 2020.<\/p>\n

We’ll see how the 2020 quarterly and year-end SP 500 EPS and growth rates change with official guidance in the Q4 ’19 conference calls.<\/p>\n

1-year % change still growing – that’s a big plus<\/strong><\/em><\/p>\n

We told readers we’d keep you posted on the bottoming of the “1-year Change %” for the forward estimate.<\/p>\n

\"\"<\/a>
Click to enhance \/ open \/ enlarge<\/figcaption><\/figure>\n

Ignore the 12\/31\/19 data point. There is not a matching data point for 12\/31\/18.<\/p>\n

Note how the 1-year rate of change continues to grow. That supports the bottom-up quarterly estimates in the first table.<\/p>\n

Could the 31% gain in the SP 500 in 2019 discount the expected improvement ? Absolutely, it’s still a positive from the last 12 months action in that forward estimate.<\/p>\n

Summary \/ conclusion: <\/strong><\/em>Most are skeptical of the 2020 “estimated” SP 500 EPS growth of 10% being forecast by IBES data. My take is estimates are conservative given the last year. and the very little y\/y growth we saw in 2019 SP 500 EPS.<\/p>\n

Particularly if we get a bump in the Energy sector and sector estimates turn positive, that and commodities \/ basic materials could help the SP 500 even though the sectors are less than 10% of the market cap.<\/p>\n

    \n
  • 2020 – SP 500 return matches SP 500 earnings growth ? That would be Ok.<\/li>\n
  • 2019 – year of PE expansion<\/li>\n
  • 2018 – year of PE contraction<\/li>\n
  • 2017 – year of PE expansion<\/li>\n<\/ul>\n

    Too much navel-gazing on the numbers.<\/p>\n

    More to come this weekend.<\/p>\n

    Thanks for reading. My personal email is brianglm@trinityasset.com<\/p>\n

     <\/p>\n

     <\/p>\n","protected":false},"excerpt":{"rendered":"

    The new “forward 4-quarter” estimate as we roll into the new January ’20 quarter is $176.74 versus last week’s $171.15.…<\/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":[92,91],"tags":[],"class_list":["post-9701","post","type-post","status-publish","format-standard","hentry","category-fwd-4-qtr-growth-rate-sp-500","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\/9701","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=9701"}],"version-history":[{"count":1,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/9701\/revisions"}],"predecessor-version":[{"id":9704,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/9701\/revisions\/9704"}],"wp:attachment":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9701"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9701"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9701"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}