S&P 500 Earnings: The Upward Revisions Are a Big Positive

 | Apr 29, 2024 12:13AM ET

It was only after posting last week’s S&P 500 earnings update that it was realized that the data metrics usually posted each week were left off last weeks blog post. Here’s last weeks S&P 500 data:

  • The forward 4-quarter estimate was $252.21 up $0.40 from the prior weeks $251.81;
  • The PE ratio on the forward estimate last week was 19.7x
  • The S&P 500 earnings yield ended the week above 5% – 5.08% to be exact – for the first time since January 19th;
h2 S&P 500 Data (this latest week):/h2
  • The forward 4-quarter estimate this week was $252.55, up from $252.51 last week;
  • Assuming a close in the S&P 500 today around 5,100, the PE ratio on the forward estimate is 20.2x
  • Assuming a 5,100 close, the S&P 500 earnings yield will fall back under 5% to 4.95% this week;
  • The Q1 ’24 bottom-up S&P 500 estimate rose to $54.42 from $53.74 last week;
  • More importantly, with 233 S&P 500 companies having reported, the “upside surprise” for EPS was 9.5% for this quarter, significantly stronger than the pretty strong three previous quarters, but let see if it tempers next week, when more than half the S&P 500 will have reported;
  • The upside revenue surprise was 1.3% though this week, also stronger than the last 2 quarters;

Again, the unusual pattern to speak of is the steadily higher sequential revisions since the start of April ’24:

  • 4/25/24: $252.55 (mega-caps start reporting)
  • 4/19/24: $252.21 (financial sector reports)
  • 4/12/24: $251.81
  • 4/05/24: $251.58 (the quarterly bump)
  • 3/31/24: $242.94

Things looked pretty normal last week, except for the higher revisions and now we’ve seen 5 consecutive weeks of sequentially higher estimates.

S&P 500 earnings are pretty strong, with just under half the index reporting.

Normally the sequential revisions are negative.

h2 What’s the Forward Quarterly Patterns Look Like?