Per Thomson Reuters, “This Week in Earnings” the forward-quarter estimate for the S&P 500 this week was $123.49 versus last week’s $123.61. The P/E ratio on the forward estimate was 17.0(x). The PEG ratio is still WAY elevated at 27.61(x), however if Energy is excluded the PEG is a little over 4(x), which is still pretty high, too.
The earnings yield on the S&P 500 is 5.93%, still hovering around the 6% area. The y/y growth rate of the forward estimate as of Friday, 4/17/15 was 0.61%, down a little from last week’s +0.72%.
Analysis: Ex-Energy’s drag of 6%, the S&P 500 is expecting 4% earnings growth for Q1 ’15, right in line where it was expected as we await the busiest two weeks of the year. Financials reported this past week, with all the big banks and brokers reporting their Q1 ’15, and most of the stocks responded accordingly.
The sectors that have shown an uptick in their expected Q1 ’15 earnings growth rates since April 1 ’15:
Consumer Staples: +1.5%, -0.6% ( perhaps dollar drag got too pessimistic? PM’s action on Friday helped no doubt.)
Financials: +14.2%, +10.9%
Health Care: +7.8%, +7.2%
Technology: +4.4%, +4.2%
150 S&P 500 components report this coming week. It is a crowded calendar.
The Energy sector earnings are expected to decline 63.7% as a sector as of Friday, April 17th. What is interesting about that is that was the exact earnings decline cited on April 1 ’15 by Thomson.
Schlumberger’s (NYSE:SLB) earnings report of last week, was notable for better-than-expected margins in North America and slightly better in International, and SLB even bought back some stock. (Long SLB)
For me this is a big week for large-cap tech: IBM (NYSE:IBM), Microsoft (NASDAQ:MSFT), Google (NASDAQ:GOOGL), and Amazon (NASDAQ:AMZN). Long all four stocks. IBM is the biggest long-shot. Hard to believe all the bad news isn’t in IBM already.