S&P 500 Earnings Update: Revisions Should Slow Into Mid-January 2022


The above spreadsheet tracks “up vs down” EPS revisions for the provided by Refinitiv, and as readers can see the last few weeks of December and the first week or two of January show (and will show) fewer revisions until investors start to see Q4 ’21 earnings beginning mid-January ’22.

The trend in positive revisions is still a positive for the market, although readers / investors need to see how the top 5–6 names look in terms of EPS / revenue revisions to gauge the true health of the market.

The above spreadsheet was started in 2010. Q1 ’21 was actually very strong from an S&P 500 EPS / revenue perspective. The first quarter of ’22 will be a tough compare for the market, maybe more so given the fears of the Fed.

S&P 500 key metrics:

  • The forward 4-quarter estimate fell to $216.08 this week versus last week’s $216.90. In two weeks, when investors see the “forward 4-quarter estimate” roll from Q4 ’21–Q3 ’22, to what is basically calendar 2022 estimates (Q1 ’22–Q4 ’22), the market today is telling us that the forward 4-quarter estimate will be $222 and change. Here’s the data (click on the spreadsheet to expand):
  • The PE ratio on the forward estimate is 21.87x while the PE on the 2022 estimate today is 20x
  • After last week’s rally, with the S&P 500 +1.22%, the S&P 500 earnings yield fell to 4.57% from the previous week’s 4.69%.
  • The 3rd quarter, ’21 bottom-up estimate will NOT likely hit $55 per share, which I thought it would. It will end the quarter near where it sits today, in the $53.72 area.

Our favorite table:

Readers can see this data from Refinitiv Earnings Scorecard is still tracking nicely higher for Q4 ’21 and then all of 2022.

Summary / conclusion: In terms of S&P 500 earnings data and revisions, the next two weeks will likely look a lot like this week and the action won’t start until January 10th or so.

This site will be out with some sector info the next week, during the quiet times of the holiday. It’s when I get the most research and writing done.

Remember take everything you read online with great skepticism, including this post. S&P 500 earnings can look healthy and move higher and the market can decline based on many factors, i.e. interest rate changes, geopolitics, tax and regulation changes, the normal rhythm of markets, etc.

Hopefully, all readers will have a wonderful holiday season.

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