Data Source: Factset
Just 2 weeks ago Q3 Earnings estimates were -4.8%. We presented the fact that the average improvement over a quarter was 3.7%. Last week, the first 110bps of improvement came in:
This week we picked up another 100bps of improvement – taking expectations to -2.7% with 29% of the S&P 500 still left to report.
So even with another 100-160bps of improvement before the end of the quarter, we will still finish with the third consecutive quarter of negative earnings growth. Here’s why that is not necessarily bad news:
The EPS beat rate for Q3 is above the 5 year average of 72% – hovering at 76% – with 71% of companies reporting.
For CY 2020, analysts are projecting earnings growth of 9.8% and revenue growth of 5.3%. Forward estimates are holding above $179 ($179.37).
The bottom-up target price for the S&P 500 is 3344.26, which is 10.1% above the closing price of 3037.56.
For a comprehensive look at Stock Market positioning, sentiment and outlook, visit our post from yesterday:
