The following is a quick recap of the latest trends in earnings estimates & revisions as of August 6, 2018 by Wall Street Analysts.
- Earnings estimates & revisions for the 3rd quarter have started coming down.
- Earnings for the 70% of S&P 500 members that have reported results are up 24.1% on 10% higher revenues.
- Tech sector earnings are up 35% on 12.9% higher revenues.
- For the S&P 500 index as a whole, total Q2 earnings are expected to be up 24% from the same period last year on 9% higher revenues.
- Earnings for the small cap S&P 600 are up 35% from the same period last year on 10% higher revenues.
- For full-year 2018, earnings for the S&P 500 index are expected to be up 21% on 6% higher revenues.
- For full-years 2019 and 2020, total earnings are expected to be up 9.4% and 9.5%, respectively. Revenues for the index are expected to be increase by 4.6% in 2019, and 4.6% in 2020.
- The implied EPS for the S&P 500, using the current 2018 P/E of 17.6x and the index close as of July 31st, is $157.35.
- Using the same methodology, the index EPS is $172.17 for 2019 (P/E of 16x) and $188.48 for 2020 (P/E of 14.6x).
We are starting to see estimates for the 3rd quarter of 2018 come down. It’s too early to call this an emerging revisions trend but it does call for increased vigilance.