S&P 500 Earnings: Forward Estimates Continue to be Revised Higher
The consistent and persistent strength in S&P 500 earnings is pretty remarkable, and per last Monday, June 3rd’s detailed S&P 500 earnings post, the S&P 500 earnings patterns are still ongoing.
S&P 500 data:
- The forward 4-quarter estimate rose again this week to $253.27 from last week’s $252.89, and early January’s $243.98. The S&P 500 forward 4-quarter estimate has added $10 in just the first half of 2024, versus (as a contrast) the first 6 months of 2023 the forward 4-quarter estimate began January ’23 at $228.38 and ended up at $225 by mid-June ’23. 2022 is closer to 2024 in terms of growth in the forward estimate, even though the S&P 500 benchmark was much lower by June, 2022, than today;
- Using an approximate closing value for the S&P 500 of 5,353, the PE on the forward estimate today is 21.1x versus last week’s 20.9x;
- The S&P 500 earnings yield fell slightly to 4.73% versus last week’s 4.79% as the S&P 500 looks to be closing up roughly 1.5% on the week;
- Upside surprises continue at 8.1% and 1.1% for S&P 500 EPS and revenue;
Conclusion:
There is little change in the general trend of S&P 500 earnings as what looks to be an almost perfect economy, as reflected in the S&P 500’s eleven sectors. With the exception of health care, which has seen a big revision lower, and smaller negative revisions in energy and staples, the other 8 sectors of the S&P 500 are seeing higher expected EPS growth rates as of June 7 ’24, versus late March ’24 and early January ’24.
While speaking with a friend yesterday who is a market technician, (while this blog usually focuses on fundamentals), I noted that it’s almost a perfect US economy, and this morning’s nonfarm payroll numbers reflect that. The jump in the unemployment rate to 4.0% will get some attention, but “jobs friday” is a report that’s made up of two different surveys, both the business and household surveys, and the surveys can deliver conflicting information.
Think of the S&P 500 earnings data, as just another input to the investing equation.
None of this is advice or a recommendation. Past performance is no guarantee of future results. Investing can involve the loss of principal even over short periods of time. All S&P 500 EPS and revenue data is sourced from the London Stock Exchange Group, although this blog uses the data in other ways and configurations.
Thanks for reading.
