Thursday, June 13, 2013

S&P 500 Revenues & Earnings Review (excerpt)

On Tuesdays, Joe and I review the latest analysts’ consensus expectations for S&P 500 operating earnings. On Thursdays, we get the latest revenues data along with the sector details for earnings. So today is a good day to review all of the data through the week of June 6.

(1) S&P 500 revenues. Consensus expectations for revenues edged up slightly for 2013 and 2014. So did forward revenues, which remained 0.8% below the recent record high during the week of April 11. Yesterday, the World Bank released its latest Global Economic Prospects, predicting that the global economy will grow at a lackluster pace of about 2.2% this year and a little better at 3% in 2014 . That is slightly weaker growth than the bank forecast in January. Those are inflation-adjusted projections. Industry analysts are currently predicting that S&P 500 revenues in current dollars will rise 2.3% this year and 4.3% next year.

(2) S&P 500 earnings. The analysts are more optimistic on S&P 500 earnings, which they expect will rise 6.8% this year to $110.87 per share and 11.3% next year to $123.39. As we reported on Tuesday, forward earnings is at a record $116.41.

(3) S&P 500 margins. The analysts are contrarians about profit margins, which they think will rise from 9.5% in 2012 to 9.9% this year, and 10.5% next year. My guess is that most investors believe that profit margins have peaked.

Today's Morning Briefing: Sentimental Journey. (1) Bullish sentiment correcting more than the market. (2) Bull/bear ratios dive after Bernanke testifies. (3) Draghi’s do-nothing policy has worked, but may be starting to disappoint. (4) Is Draghi’s OMT unconstitutional? (5) BOJ playing poker with the Bond Vigilantes. (6) World Bank sees lackluster global growth ahead. (7) Industry analysts see slow-growing revenues ahead. (8) They are more upbeat on earnings though. (9) Focus on underweight-rated Consumer Staples. (More for subscribers.)

No comments: