S&P 500 Weekly Earnings Update: Year-Over-Year Growth Rates Will Start To Slow
Brian Gilmartin | Jul 11, 2021 01:39AM ET
Briefing.com publishes a list of the coming week’s earnings releases every Friday, and above is this week’s slate of companies scheduled to report their Q2 ’21 financial results.
On Tuesday, July 13, pre-market, we get JPMorgan (NYSE:JPM), and Goldman Sachs (NYSE:GS) and then Wednesday we see Bank of America's (NYSE:BAC) second quarter’s results as well as Wells Fargo (NYSE:WFC).
At least 18 major financial services firms report this week. Here is another look at scheduled earnings releases over the next 2 weeks, from Bespoke:
The source data is IBES by Refinitiv, but the trends tracked weekly by us, shows that y/y growth rates will slow as compares get tougher against 2020’s recovery.
That’s probably not a big surprise to readers.
Look at the y/y growth in percentages for Q2 ’21 EPS and revenue. The second quarter’s ’21 EPS expected growth rate as of this weekend rose 20% since Dec. 31, 2020. Expected revenue growth rose from 12% to 18% for Q2 ’21.
The “average” y/y revenue growth rate for the S&P 500 going back to Q4 ’12 (when I first started tracking the data) was +2.5%. Average EPS growth was +4.9%.
Look at the above and below spreadsheets against that historical average.
h2 How Does 2022 Look? /h2
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2022’s expected quarterly growth rates for the S&P 500 will return to a more normal, historical pattern.
S&P 500 data:
- The forward 4-quarter estimate last week was $199.63 vs. the previous week’s $199.34 and the Dec. 31, 2020’s estimate of $159.02
- The PE on the forward estimate is now 21.89x
- The S&P 500 earnings yield is 4.57% vs the previous week’s 4.64%.
Top 10 client positions as of June 30, 2021:
- Microsoft (NASDAQ:MSFT): +22.3% YTD return
- Blackrock Strategic Income (NYSE:BASIKS): +1.11% YTD return
- Vanguard FTSE Emerging Markets Index Fund ETF Shares (NYSE:VWO): +9.09% YTD return
- Amazon (NASDAQ:AMZN): +5.63% YTD return
- JP Morgan Income Fund:+3.45% YTD return
- Schwab (NYSE:SCHW):+37.95% YTD return
- JP Morgan (JPM): +23.82% YTD return
- Invesco S&P 500® Equal Weight ETF (NYSE:RSP):+19.06%
- Oakmark International (OAKIX): +13.68% YTD return
- Tesla (NASDAQ:TSLA):-3.68% YTD return
S&P 500 YTD return as of June 30, 2021: +15.25%
Top 10 equity positions as of June 30, 2021:
- MSFT
- VWO
- AMZN
- SCHW
- JPM
- RSP
- OAKIX
- TSLA
- QQQ
- GOOGL
While everyone wants to talk individual stocks and individual stock earnings expectations, tracking the S&P 500 data as a whole—and the patterns in evidence—still indicates the higher revisions to expected quarterly growth rates hasn’t changed for the key benchmark for the last 6 months.
The big reports this week will come from financials. Expected revenue growth for the sector is -5.3% for the second quarter, while EPS growth is expected at +102%. Third quarter, 2021 Financial sector revenue growth is -2.7% while EPS next quarter is looking at +15.2% as of last week.
We’ll know more after the financials report this week. With loan loss reserve releases, there still should be capital to return to bank and financial sector investors.
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