- For Q1 ’23 earnings, the “upside surprise” or beat rate for Q1 ’23 S&P 500 EPs was 6.8%%;
- For Q2 ’23 earnings, the “upside surprise” or beat rate for Q2 ’23 S&P 500 EPS was even stronger at +7.9;
- Year-over-year EPS growth for Q1 and Q2 ’23 was just 1% and -2% respectively.
- The forward 4-quarter estimate (FFQE) jumped to $239.93 this week, up from last week’s $232.95 as the new FFQE runs from Q4 ’23 through Q3 ’24, and thus, the old Q3 ’23 through Q2 ’24 is gone.
- Given Friday’s market action, the new PE is 18x even with the rally and given the jump in the FFQE, down from 18.5x last week;
- Even the S&P 500 earnings yield ended the week higher at 5.56% vs last week’s 5.43%;
- The Q3 ’23 bottom-up quarterly estimate is $55.78 down from $55.92 as of last Friday, September 29th;
- It will take a few weeks to get a good read on the “upside surprises” for revenue and EPS;
- Summary
The revenue upside surprises were much smaller for both Q1 and Q2 ’23 at +1.3% and +2.6% respectively.
The point being – despite lackluster S&P 500 EPS and revenue growth – the upside surprise (meaning actual EPS vs consensus expectations) in S&P 500 earnings has been “way good”.
Does it continue for Q3 ’23 ? We’ll find out starting Friday, October 13th, 2023, when a number of large-cap financials report.
No Recession in Sight for SP 500 Earnings: 
Here’s one of my favorite tables: note the stability in 2024 EPS estimates for all 4 quarters.
That’s a good tell.
While everyone is locked in on Q3 and Q4 24, so far there has been very little negative revision in the 2024 EPS growth rates.
As was noted in last night’s post too, year-over-year comparisons for S&P 500 EPS and revenue growth get much easier starting in Q4 ’23.
Watch for major earnings pre-announcements that are negative; when companies start warning that’s the signal that the environment has changed, but that usually shows up in numbers (to a smaller degree) in revisions beforehand if the analysts are doing their checks.
There will be more forthcoming over the weekend in terms of S&P 500 earnings and economic commentary.
S&P 500 data:
So far, Q3 ’23 S&P 500 earnings should be ok, given the strength in upward revisions and the beat rates from Q2 ’23 earnings. But we’ll have to wait and see what the numbers and guidance look like.
Given the economic data like this morning’s September jobs report it’s hard not to be bullish S&P 500 earnings results for Q3 ’23, but that makes me uncomfortable. The best results come from low expectations and poor sentiment as we enter earnings season.
All S&P 500 EPS and revenue data are sourced from IBES data by Refinitiv. Take everything with a grain of salt. Past performance is no guarantee of future results.
Thanks for reading. Much more to come over the weekend.