S&P 500 Earnings: Q1 '21 S&P 500 EPS Growth Has Jumped To 46.3%
Summary
- The Q1 '21 S&P 500 expected EPS growth rate is now 46.3%.
- Q2 '21 expected S&P 500 EPS growth rate is 60%, which will be the easiest comp versus 2020.
- The expected Q1 '21 revenue growth rate is now 11.6%.
Some quick stats:
- As the headline says, the Q1 '21 S&P 500 expected EPS growth rate is now 46.3%.
- Q2 '21 expected S&P 500 EPS growth rate is 60%, which will be the easiest comp versus 2020.
- This same Q1 '21 expected growth rate was 16% on 12/31/20.
- The expected Q1 '21 revenue growth rate is now 11.6%.
Source: IBES data by Refinitiv
This table or spreadsheet has been kept for readers since the pandemic struck. I wanted readers to see the week-to-week changes in growth rates since "This Week in Earnings" truncates the data readers/investors lose the impact of inflection points.
The progression has been remarkable, but hardly a surprise given Fed liquidity and administration stimulus and spending.
Source: IBES data by Refinitiv
In this table, which has been kept up every week for clients, note the change in Communication Services (Google (GOOG) (GOOGL)) and Tech (Microsoft (MSFT) and Apple (AAPL)) this week.
The two sectors are highlighted in black.
Consumer Discretionary hasn't changed much despite Amazon's (AMZN) earnings Thursday night. Either the revisions are sparse, or the sell-side hasn't fully upgraded their numbers for 2021.
Note how the Financial sector earnings continue to be revised higher. That could be a function of personal income at an all-time high and the expectation that credit losses will continue to decline dramatically.
The fact is these upward revisions are pretty incredible, and the peak will likely be with 2nd quarter 2021 earnings releases in mid-July '21.
Summary/conclusion: A busy work schedule is preventing me from writing about anything but the basic S&P 500 data, and it's been such a positive story for so long, it's almost getting tiresome. It's hard to understand how sell-side analysts have so badly missed the underlying strength in so many of the sectors like Financials, like Consumer Discretionary, etc.
The compares get tougher after July '21 and the 2nd quarter is reported. Keep that in mind.
The market action around Microsoft, Apple and Amazon this week - despite remarkable upside in EPS and revenue (actual vs consensus estimates) leads me to believe we have a few more months of sluggish action ahead in the mega-caps. (Long all three, but much more MSFT and AMZN, than AAPL).
However take any prediction with substantial skepticism. The rotation started last September '20 away from the "mega-cap 6" (top names in the S&P 500 by market cap) and began in earnest with the election in early November '21, as Financials, Energy, Retail, "value investing," etc. really took flight.
I'm expecting this to even back out in the back half of 2021.
Interesting that as of this weekend, the consensus 2022 EPS estimate of $207.93 is looking for 12% growth next year - still double digits.
Thanks for reading.
Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.
This article was written by
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Comments (8)
Higher taxes?
Higher rates?
Chip shortages?
Nothing?
The Woke Capital faction of the ''free market'' is dominant right now. Theirs is the prevailing political narrative. Kochs and their cronies are probably looking for a revival via their neocon stooges. Let's see. Interesting times ahead.
