Summer 2019 Snapshot of Expected Future S&P 500 Earnings

Every three months, we take a snapshot of the expectations for future earnings in the S&P 500 at approximately the midpoint of the current quarter, shortly after most U.S. firms have announced their previous quarter’s earnings.

The earnings outlook for the S&P 500 has weakened since our Spring 2019 edition. The projected trailing year earnings per share for the index in December 2019 has fallen from the $150.96 forecast three months earlier to $146.63 this month.

The oddest thing about this chart is the projected boost to earnings for 2019-Q4. We don’t know any reason why Standard & Poor’s trailing year earnings is so optimistic in this quarter after deflating so much in the quarters preceding it.

Looking at that optimism even further out, expected earnings for the S&P 500 at the end of 2020 have also weakened, but by a smaller amount, falling from $167.97 to $166.51 per share, where S&P is projecting a sharply upward trajectory.

You can see in the chart how those projections turned out during 2018 and 2019. These will almost certainly be revised downward, sharply, in upcoming quarters.

Data Source

Silverblatt, Howard. Standard & Poor. S&P 500 Earnings and Estimates. [Excel Spreadsheet]. 15 August 2019. Accessed 16 August 2019.