Entering text into the input field will update the search result below

Q3 And Q4 '20 S&P 500 EPS And Revenue Expectations - Look Beyond This Quarter

Brian Gilmartin, CFA profile picture
Brian Gilmartin, CFA
9.68K Followers

Summary

  • What genuinely surprised me was that both Q3 and Q4 S&P 500 EPS have declined less than 1% cumulatively in the last three weeks.
  • From the weekly blog work, it was obvious the rates of decline in forward estimates were getting less worse, but the prospects now are that the forward estimates could actually start to improve.
  • Let's wait and see though what the May '20 quarter end looks like for the likes of Oracle, FedEx, Accenture and many others that will report in June 2020.

Thanks to David Aurelio and TJ Dhillon at IBES for providing the above data for the trend-watching in y/y growth of Q3 '20 and Q4 '20 revenue and EPS for the S&P 500.

With everyone watching Q2 '20 - widely expected to be the nadir for y/y S&P 500 revenue growth at -43% and 12.3%, respectively, as of last Friday's, May 29, 2020's "This Week in Earnings" - as investors we have to look further out and see what those numbers are doing as well.

What genuinely surprised me was that both Q3 and Q4 S&P 500 EPS have declined less than 1% cumulatively in the last three weeks.

From the weekly blog work, here, here and here, it was obvious the rates of decline in forward estimates were getting less worse, but the prospects now are that the forward estimates could actually start to improve.

Let's wait and see though what the May '20 quarter end looks like for the likes of Oracle (ORCL), FedEx (FDX), Accenture (ACN) and many others that will report in June 2020.

Thanks for reading.

Original post

Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.

This article was written by

Brian Gilmartin, CFA profile picture
9.68K Followers
Brian Gilmartin, is a portfolio manager at Trinity Asset Management, a firm he founded in May, 1995, catering to individual investors and institutions that werent getting the attention and service deserved, from larger firms. Brian started in the business as a fixed-income / credit analyst, with a Chicago broker-dealer, and then worked at Stein Roe & Farnham in Chicago, from 1992 - 1995, before striking out on his own and managing equity and balanced accounts for clients. Brian has a BSBA (Finance) from Xavier University, Cincinnati, Ohio, (1982) and an MBA (Finance) from Loyola University, Chicago, January, 1985. The CFA was awarded in 1994. Brian has been fortunate enough to write for the TheStreet.com from 2000 to 2012, and then the WallStreet AllStars from August 2011, to Spring, 2012. Brian also wrote for Minyanville.com, and has been quoted in numerous publications including the Wall Street Journal.

Recommended For You

Comments (5)

s
Do you believe all advertising? Advertisers want you to buy their products. Jaguar advertised in the 1960's. The actual product was below average in dependability. That was never mentioned in their ads. Todays market touts are no different. They know the stock market is highly overbought. But it will never be mentioned in their "ads".
Brian Gilmartin, CFA profile picture
@southbuckeye what are you talking about - advertisements ?
b
As somebody who managed equity money (mutual fund) for years I’ll toss out another explanation. Most of Q2 earnings are in and guidance has been pulled. The average analyst could’ve come up with an estimate that’s not spoon fed to them by a company CFO. Basically they are frozen in place until somebody tells them what earnings will be.
Brian Gilmartin, CFA profile picture
@browndlee could be. Makes sense. Having a CFO give guidance for the next qtr though isn't a bad thing. Once you know expected rev growth and margins, as an analyst the rest is easy. And if the guidance is "spoon-fed" that means the quarter is ordinary and predictable. Why disparage that ?

Agree completely that the uncertainty and the variables around Q2 are / were so great, it's likely the quarter has been low-balled.

Thanks for the note.
TraderJoeZ profile picture
Right on.
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!

Related Stocks

SymbolLast Price% Chg
SPY--
SPDR® S&P 500 ETF Trust
VOO--
Vanguard S&P 500 ETF
SH--
ProShares Short S&P500 ETF
IVV--
iShares Core S&P 500 ETF
SDS--
ProShares UltraShort S&P500 ETF

Related Analysis

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.