Earnings Estimates Trends

S&P500 earnings trends and estimates are a notably important topic, for a variety of reasons, at this point in time.

FactSet publishes a report titled “Earnings Insight” that contains a variety of information including the trends and expectations of S&P500 earnings.

For reference purposes, here are two charts as seen in the “Earnings Insight” report of February 14, 2020:

from page 32:

(click on charts to enlarge images)

S&P500 EPS estimates 2020 & 2021

from page 33:

S&P500 Annual EPS 2010-2021

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Please Note – The above is excerpted from the EconomicGreenfield.com (published by RevSD, LLC) post of February 20, 2020, titled “Trends Of S&P500 Earnings Forecasts

_____

RevSD, LLC offers the above data and projections for informational purposes only, and does not necessarily agree with information provided by these outside parties.

—–

RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

The February 2020 Wall Street Journal Economic Forecast Survey – Notable Aspects

The February 2020 Wall Street Journal Economic Forecast Survey was published on February 13, 2020.  The headline is “WSJ Survey: Coronavirus Likely to Hit First-Quarter U.S. Growth.”

I found numerous items to be notable – although I don’t necessarily agree with them – both within the article and in the “Economist Q&A” section.

An excerpt:

Some 35% of economists expect the next recession will start in 2021, up from 30.9% last month’s survey, while 29.7% expect one to start in 2022. Just 10.8% see a recession starting this year.

As seen in the “Recession Probability” section, the average response as to the odds of another recession starting within the next 12 months was 25.6%. The individual estimates, of those who responded, ranged from 0% to 67%.  For reference, the average response in January’s survey was 23.97%.

As stated in the article, the survey’s 63 respondents were academic, financial and business economists.  Not every economist answered every question.  The survey was conducted February 7 – February 11, 2020.

Economic Forecasts

The current average forecasts among economists polled include the following:

GDP:

full-year 2020:  1.88%

full-year 2021:  1.94%

full-year 2022:  1.91%

Unemployment Rate:

December 2020: 3.60%

December 2021: 3.81%

December 2022: 4.01%

10-Year Treasury Yield:

December 2020: 1.98%

December 2021: 2.20%

December 2022: 2.44%

____

Please Note – The above is excerpted from the EconomicGreenfield.com (published by RevSD, LLC) post of February 13, 2020, titled “The February 2020 Wall Street Journal Economic Forecast Survey

_____

RevSD, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.

—–

RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

Earnings Estimates Trends

S&P500 earnings trends and estimates are a notably important topic, for a variety of reasons, at this point in time.

FactSet publishes a report titled “Earnings Insight” that contains a variety of information including the trends and expectations of S&P500 earnings.

For reference purposes, here are two charts as seen in the “Earnings Insight” report of January 17, 2020:

from page 24:

(click on charts to enlarge images)

S&P500 EPS forecasts

from page 25:

S&P500 EPS 2010-2021

_____

Please Note – The above is excerpted from the EconomicGreenfield.com (published by RevSD, LLC) post of January 22, 2020, titled “Trends Of S&P500 Earnings Forecasts

_____

RevSD, LLC offers the above data and projections for informational purposes only, and does not necessarily agree with information provided by these outside parties.

—–

RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

The January 2020 Wall Street Journal Economic Forecast Survey – Notable Aspects

The January 2020 Wall Street Journal Economic Forecast Survey was published on January 16, 2020.  The headline is “WSJ Survey: U.S., China Agreement Will Boost Growth.”

I found numerous items to be notable – although I don’t necessarily agree with them – both within the article and in the “Economist Q&A” section.

Two excerpts:

On average, forecasters expected GDP would expand 1.9% this year, measured from the fourth quarter of 2019 to the fourth quarter of this year, compared with an anticipated 2.3% in 2019. GDP increased 2.5% in 2018 from the year-earlier fourth quarter and 2.8% in 2017, according to the Commerce Department. Economists saw the unemployment rate, which was 3.5% in December, ticking up to 3.6% in December 2020.

also:

Still, economists were broadly upbeat for 2020. The probability of a recession this year ticked down in January to 24%, the lowest average since last May.

About 30% of economists said they expect the next recession to start in 2021, and another 30% see one in 2022. Roughly 14% expect it in 2023.

As mentioned above, as well as seen in the “Recession Probability” section, the average response as to the odds of another recession starting within the next 12 months was 23.97%. The individual estimates, of those who responded, ranged from 0% to 67%.  For reference, the average response in December’s survey was 25.85%.

As stated in the article, the survey’s 71 respondents were academic, financial and business economists.  Not every economist answered every question.  The survey was conducted January 10 – January 14, 2020.

Economic Forecasts

The current average forecasts among economists polled include the following:

GDP:

full-year 2019:  2.27%

full-year 2020:  1.87%

full-year 2021:  1.97%

full-year 2022:  1.97%

Unemployment Rate:

December 2020: 3.62%

December 2021: 3.83%

December 2022: 4.04%

10-Year Treasury Yield:

December 2020: 2.03%

December 2021: 2.25%

December 2022: 2.53%

____

Please Note – The above is excerpted from the EconomicGreenfield.com (published by RevSD, LLC) post of January 16, 2020, titled “The January 2020 Wall Street Journal Economic Forecast Survey

_____

RevSD, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.

—–

RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

“CFO Signals” Report – Excerpts

Recently Deloitte released their “CFO Signals” “High-Level Summary” report for the 4th Quarter of 2019.

As seen in page 3 of the report, there were 147 survey respondents.  As stated:

“Each quarter (since 2Q10), CFO Signals has tracked the thinking and actions of CFOs representing many of North America’s largest and most influential companies.

All respondents are CFOs from the US, Canada, and Mexico, and the vast majority are from companies with more than $1 billion in annual revenue. For a summary of this quarter’s response demographics, please see the sidebars and charts on this page. For other information about participation and methodology, please contact [email protected]

Here are some of the excerpts that I found notable:

from page 5:

Perceptions

How do you regard the status of the North American, European, and Chinese economies? Perceptions of North America leveled off, with 69% of CFOs rating current conditions as good (68% last quarter), and 23% expecting better conditions in a year (up from 15%). Perceptions of Europe rose, but only to 7% and 6%; China fell to 18% and 11%. Page 7.

What is your perception of the capital markets? Eighty-six percent of CFOs say debt financing is attractive. Equity financing is considered attractive by 43% of public company CFOs and 26% of private company CFOs. Seventy-seven percent say US equity markets are overvalued, up from 63%. Page 8.

Sentiment

What external/internal risks worry you the most? CFOs express ongoing trade policy worries, with growing concern about political turmoil, competition, consumer demand, and upcoming US elections. Internally, talent concerns continued, while concerns around change, costs, and growth rose. Page 9.

Compared to three months ago, how do you feel about the financial prospects for your company? The net optimism index rose from last quarter’s -5 to +11 this quarter, but remains among the lowest levels in three years. Thirty percent of CFOs express rising optimism (26% last quarter), and 19% express declining optimism (31% last quarter). Page 10.

Expectations

What is your company’s business focus for the next year? Although companies continue to focus mostly on growth and investment, their growing focus on cost reduction and returning cash (multi-year highs) may suggest growing defensiveness in anticipation of a downturn. Page 11.

How will your key operating metrics change over the next 12 months? YOY revenue growth expectations slid from 4.3% to 3.7% (three-year low). Earnings rose from 5.6% to 6.0% (but still second-lowest in nine years); capital spending edged up from 3.6% to 3.7% (still near its three-year low). Hiring fell from 1.6% to 1.1% (second-lowest in six years). Dividend growth rose from 3.9% to 4.3%. Page 12.

Special topic: 2020 economic, market, and company expectations

What are your economic expectations? A minority of CFOs expect improvement in the US, Canadian, and Mexican economies; expectations for consumer and business spending declined sharply, and those for labor costs rose. Page 13.

What are the prospects for a US downturn and has your company taken defensive action? Ninety-seven percent of CFOs say a downturn has already begun or will next year; compared to 1Q19, companies appear to be taking more defensive action—especially around spending and headcount. Page 14-15.

What are your expectations for the capital markets? Contrary to this time last year, CFOs expect very low interest rates and 10-year bond yields for the next calendar year; they again expect a strong US dollar. Page 16.

What are your expectations for your company? CFOs are less likely than last year to expect industry revenue and prices to rise; they are mostly unlikely to make major changes to their strategy due to a downturn or upcoming elections. Page 17.

Compared to three years ago, how has your company adjusted its geographic focus? CFOs cite a higher focus on US, European, Chinese, and other Asian markets, and expansion of capacity in the latter three regions. Page 18.

Special topic: Response to climate change

Are you getting pressure from stakeholders to act on climate change? More than 70% of CFOs say their company is under at least moderate pressure to act on climate change from at least one stakeholder group. Page 19.

Is your company taking action in response to climate change? More than 90% of CFOs say their company has taken at least one action in response to climate change, with the average CFO reporting nearly four. Page 20.

Does your company have greenhouse gas reduction targets? Overall, 44% of all responding CFOs (52% of those who know their status) say their company already has or is working on greenhouse gas reduction targets. Page 21.

from page 10:

Sentiment

Optimism regarding own-companies’ prospects

Own-company optimism rebounded from last quarter’s nearly seven-year low, but remains muted. Canada is highest at +27, with the US and Mexico lower at +11 and -33, respectively.

Net optimism peaked in 1Q18 at +54, then declined sharply through the rest of the year. Although it rebounded somewhat in the first part of 2019, it turned negative last quarter for the first time in nearly seven years.

This quarter’s net optimism bounced back from last quarter’s -5 to a better (but still low) +11. Thirty percent of CFOs expressed rising optimism (up from 26%), while 19% cited declining optimism (down from 31%).

Net optimism for the US rebounded from last quarter’s -4 to +11. Likely fueled by its strong second quarter growth (see “Key developments” box on page 4), Canada rose sharply from last quarter’s +10 to +27. Mexico rose from last quarter’s dismal -50 to a still-dismal -33.

Manufacturing is the most pessimistic at -6, with Retail/Wholesale and Healthcare/Pharma also relatively pessimistic at zero. Energy/ Resources and Financial Services both showed marked increases (to +30 and +28, respectively). Technology and Services were also relatively high.

from page 12:

Expectations

Growth in key metrics, year-over-year

All growth expectations sit at or near multiyear lows, with the US showing considerable weakness. Technology, Retail/Wholesale, and Healthcare/Pharma were relative bright spots; Manufacturing and Energy/Resources trailed for most metrics.

Revenue growth fell from 4.3% to 3.7%, a three-year low. The US fell to a three-year low. Canada fell below its two-year average. Mexico fell to a new low. Technology and Healthcare/Pharma lead; Energy/Resources and Manufacturing trail.

Earnings growth rose from 5.6% to 6.0%, but sits at its second-lowest level in survey history. The US rose slightly, but sits at its second-lowest level in nine years. Canada rose again to well above its two-year average. Mexico rose, but sits near its two-year low. Technology and Retail/ Wholesale lead; Energy/Resources and Manufacturing trail.

Capital spending growth rose slightly from 3.6% to 3.7%, remaining near its three-year low. The US slid to a three-year low. Canada fell to well  below its two-year average. Mexico rose sharply, but is still below the two-year average. Technology and Financial Services lead; Manufacturing trails.

Domestic hiring growth slid sharply from 1.6% to 1.1%, the second-lowest level in nearly six years. The US fell to a three-year low. Canada rose, but is well below its two-year average. Mexico fell to a six-year low. Technology leads; Energy/ Resources and Manufacturing trail.

Dividend growth rose from 3.9% to 4.3%, but remains well below the two-year average.

Please see the appendix for industry-specific charts. Note that industry sample sizes vary and that results are volatile for the smallest. Due to a small sample size, T/M/E was not used as a comparison point.

Among the various charts and graphics in the report are graphics depicting trends in “Own Company Optimism” on page 10 and “Economic Optimism” found on page 7.

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RevSD, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.

—–

RevSD, LLC (revsd.com) is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

Earnings Estimates Trends

S&P500 earnings trends and estimates are a notably important topic, for a variety of reasons, at this point in time.

FactSet publishes a report titled “Earnings Insight” that contains a variety of information including the trends and expectations of S&P500 earnings.

For reference purposes, here are two charts as seen in the “Earnings Insight” report of December 13, 2019:

from page 25:

(click on charts to enlarge images)

S&P500 expected EPS 2019 & 2020

from page 26:

S&P500 EPS calendar years 2009-2020

_____

Please Note – The above is excerpted from the EconomicGreenfield.com (published by RevSD, LLC) post of December 20, 2019, titled “Trends Of S&P500 Earnings Forecasts

_____

RevSD, LLC offers the above data and projections for informational purposes only, and does not necessarily agree with information provided by these outside parties.

—–

RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

The December 2019 Wall Street Journal Economic Forecast Survey – Notable Aspects

The December 2019 Wall Street Journal Economic Forecast Survey was published on December 18, 2019.  The headline is “U.S. Expansion Expected to Continue Through 2020.”

I found numerous items to be notable – although I don’t necessarily agree with them – both within the article and in the “Economist Q&A” section.

Three excerpts:

The U.S. expansion, now in its 11th year, will continue through the 2020 presidential election with a healthy labor market backing it up, economists say.

also:

On average, they expect U.S. economic growth to slow slightly in 2020, to a year-over-year rate of 1.8% in the fourth quarter from an estimated 2.2% in 2019. They also see lower odds of a recession over the next year than they did in the prior two months.

also:

Just over a third of economists expect the next recession will come in 2021. One-fifth expect it in 2020, and 22.9% expect it to come in 2022.

As seen in the “Recession Probability” section, the average response as to the odds of another recession starting within the next 12 months was 25.85%. The individual estimates, of those who responded, ranged from 5% to 65%.  For reference, the average response in November’s survey was 30.19%.

As stated in the article, the survey’s 57 respondents were academic, financial and business economists.  Not every economist answered every question.  The survey was conducted December 12 – December 16, 2019.

Economic Forecasts

The current average forecasts among economists polled include the following:

GDP:

full-year 2019:  2.24%

full-year 2020:  1.78%

full-year 2021:  1.88%

full-year 2022:  1.99%

Unemployment Rate:

December 2019: 3.53%

December 2020: 3.68%

December 2021: 3.84%

December 2022: 3.98%

10-Year Treasury Yield:

December 2019: 1.84%

December 2020: 2.01%

December 2021: 2.28%

December 2022: 2.54%

____

Please Note – The above is excerpted from the EconomicGreenfield.com (published by RevSD, LLC) post of December 18, 2019, titled “The December 2019 Wall Street Journal Economic Forecast Survey

_____

RevSD, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.

—–

RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

Earnings Estimates Trends

S&P500 earnings trends and estimates are a notably important topic, for a variety of reasons, at this point in time.

FactSet publishes a report titled “Earnings Insight” that contains a variety of information including the trends and expectations of S&P500 earnings.

For reference purposes, here are two charts as seen in the “Earnings Insight” (pdf) report of November 15, 2019:

from page 22:

(click on charts to enlarge images)

S&P500 EPS forecasts

from page 23:

annual S&P500 EPS 2009-2020

_____

Please Note – The above is excerpted from the EconomicGreenfield.com (published by RevSD, LLC) post of November 19, 2019, titled “Trends Of S&P500 Earnings Forecasts

_____

RevSD, LLC offers the above data and projections for informational purposes only, and does not necessarily agree with information provided by these outside parties.

—–

RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

The November 2019 Wall Street Journal Economic Forecast Survey – Notable Aspects

The November 2019 Wall Street Journal Economic Forecast Survey was published on November 7, 2019.  The headline is “WSJ Survey: Economists Split on Causes of Hiring Slowdown.”

I found numerous items to be notable – although I don’t necessarily agree with them – both within the article and in the “Economist Q&A” section.

An excerpt:

Economists are roughly split over whether the recent hiring slowdown reflects primarily a shortage of workers or softening demand for labor, a sign of continuing uncertainty about the outlook.

In The Wall Street Journal’s latest survey of economists, 45.3% blamed the slowdown on the tight labor market, which has made it harder for many employers to find enough workers. An additional 37.7% of respondents said the issue was ebbing desire to expand payrolls.

As seen in the “Recession Probability” section, the average response as to the odds of another recession starting within the next 12 months was 30.19%. The individual estimates, of those who responded, ranged from 10% to 60%.  For reference, the average response in October’s survey was 34.19%.

As stated in the article, the survey’s 57 respondents were academic, financial and business economists.  Not every economist answered every question.  The survey was conducted November 1 – November 5, 2019.

Economic Forecasts

The current average forecasts among economists polled include the following:

GDP:

full-year 2019:  2.08%

full-year 2020:  1.72%

full-year 2021:  1.96%

full-year 2022:  1.94%

Unemployment Rate:

December 2019: 3.60%

December 2020: 3.79%

December 2021: 3.97%

December 2022: 4.03%

10-Year Treasury Yield:

December 2019: 1.76%

December 2020: 1.97%

December 2021: 2.29%

December 2022: 2.51%

____

Please Note – The above is excerpted from the EconomicGreenfield.com (published by RevSD, LLC) post of November 8, 2019, titled “The November 2019 Wall Street Journal Economic Forecast Survey

_____

RevSD, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.

—–

RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

Earnings Estimates Trends

S&P500 earnings trends and estimates are a notably important topic, for a variety of reasons, at this point in time.

FactSet publishes a report titled “Earnings Insight” that contains a variety of information including the trends and expectations of S&P500 earnings.

For reference purposes, here are two charts as seen in the “Earnings Insight” (pdf) report of October 18, 2019:

from page 23:

(click on charts to enlarge images)

S&P500 EPS estimates for 2019 & 2020

from page 24:

S&P500 Annual EPS 2009-2020

_____

Please Note – The above is excerpted from the EconomicGreenfield.com (published by RevSD, LLC) post of October 23, 2019, titled “Trends Of S&P500 Earnings Forecasts

_____

RevSD, LLC offers the above data and projections for informational purposes only, and does not necessarily agree with information provided by these outside parties.

—–

RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.