Another Look At 2019 S&P 500 Earnings

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by: Brian Gilmartin, CFA

In last weekend's post on S&P 500 earnings, we looked at the weekly rate of change in the S&P 500 2019 EPS estimate.

Here's the same data looking at the year-over-year change in the 2019 SP 500 EPS estimate:

  • 9/14/18: $178.85 +12.5% expected y/y growth
  • 8/17/18: $178.58 +12.1% expected y/y growth
  • 7/13/18: $177.16 +10.7% expected y/y growth
  • 6/15/18: $176.94 +9.9% expected y/y growth
  • 5/13/18: $176.61 +9.1% expected y/y growth

(Source: Thomson Reuters IBES earnings data, tracking the data is my own work)

To provide some color to the above, the 52-week change between the current S&P 500 forward EPS estimate and the estimate from 52 weeks ago continues to expect gradually faster growth.

Take this data with a small grain of salt though. We will get the first peek at 2019 S&P 500 guidance from some companies with October earnings, but the majority of full-year 2019 earnings guidance will come in January - February of '19.

Readers need to know that in 2019 the S&P 500 will be lapping the reduction to a 20% corporate income tax rate, which we estimated here as accounting for roughly half of the 2018's 20% EPS growth rate.

Right now, 2019 S&P 500 earnings estimates are trending the right way, and the fact that there's little "exuberance" over this is indicative of the post-2008 world.

Market valuation will always be used by both market bulls and bears - keep the faith - my own opinion is that this post-2008 S&P 500 and the US stock market are very healthy.