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On Sept. 18, 2020, the consensus year-over-year EPS development estimate for Q2 ’21 was 43.5%. The precise development fee with simply two weeks left within the quarter is—as of Friday—95.5%.
The anticipated yoy income development fee for Q2 ’21 on Sept. 18, 2020 was 12.6%, however that very same quantity immediately is 25%, with two weeks left in Q2 ’21. (For all sensible functions, assume that Q2 ’21 received’t change since firms reporting in September usually have August ’21 quarter-end.)
Trying on the inflection level, when This autumn ’20 earnings began in January ’21, the Q2 ’21 development charges began to speed up. and the numbers accelerated even sooner beginning on Feb. 1 ’21.
The rationale for pointing this out is that sell-side consensus grew to become much more tentative across the pandemic they usually dramatically underestimated the precise energy of the outcomes the final 4 – 5 quarters.
It is going to be attention-grabbing to see how 2022 S&P 500 EPS and income development fee revisions change with Q3 ’21 earnings beginning early October ’21.
How does 2022 estimated quarterly development charges look immediately ?
This knowledge from IBES by Refinitiv from the “Earnings Scorecard” exhibits the development in anticipated 2022 S&P 500 EPS and income development charges by quarter since late April ’21.
Subsequent 12 months will doubtless see extra “regular” EPS and income development charges, however as readers can see, the estimated development charges are nonetheless trending larger.
That’s a superb signal.
It doesn’t imply readers ought to be bullish or bearish: in 1994, S&P 500 EPS grew 20% yoy and the S&P 500 returned 1% on the 12 months thanks to six fed funds fee hikes by the Fed and better rates of interest, throughout the yield curve.
However given the outdated saying, “the quickest man doesn’t all the time win the race, but it surely’s not a nasty strategy to wager,” the constructive revisions are comforting to see for the bulls.
Capital markets and situations change quickly today. Learn the whole lot with nice skepticism.
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