Ahead of the long weekend, here is what the S&P 500 earnings data looks like, compliments of IBES data by Refinitiv.
Only one name of note will report next week and that is Oracle (NYSE:ORCL), one of the 1990s tech giants struggling with the cloud transition. LuluLemon (NASDAQ:LULU) is also scheduled to report after the bell on Tuesday, September 8, 2020.
S&P 500 forward earnings curve:
Source data: IBES data by Refinitiv
As readers will note, since July 2, there has been steady improvement in the sequential and 4-week rate of change for the S&P 500 forward earnings curve.
The above table was started with March/April of 2020 with COVID-19, so it might become less useful as we move through Q4 ’20. Eventually, this blog will return to the previous format.
3,400 is being used as the S&P 500 value since this is being written mid-day on Friday, September 4th.
S&P 500 metrics:
- The forward 4-quarter estimate rose to $146.00 this week vs. last week’s $145.97. Since July 2nd, there has been only one week of the last 10 that S&P 500 earnings didn’t improve sequentially, which is just the opposite of the earnings pattern in more “normal” times. In other words, the forward 4-quarter estimate usually starts the quarter at its highest value and by the end of the quarter is near its lowest value of the 12 weeks.
- The PE ratio is 23x, thanks to the 2.8% decline in the benchmark this week.
- The average “expected” EPS growth for 2020 and 2021 is still averaging 4%, for the 21st consecutive week.
- The S&P 500 earnings yield rose to 4.29% after last week’s 4.16% print, the lowest since June 19th’s 4.14% print.
Summary/conclusion: This broad look at the S&P 500 earnings data probably won’t reveal much insightful information until we start to get Q3 ’20 earnings around October 19th, 2020. The S&P 500 earnings yield is probably more indicative of understated or too pessimistic forward earnings estimates than higher prices, although the tech sector is distorting everything in the benchmark. The S&P 500 earnings curve shows us that 26x the 2020 S&P 500 EPS estimate is pretty salty.
The downtime over the Labor Day weekend will be spent looking at some more specific topics.
Remember, S&P 500 earnings estimates change daily.
Thanks for reading.
Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.