The September 27 Fact Set Earnings Insight model is flashing a ‘soft’ warning signal about the growth expectations for 2019 and 2020 earnings. The latest consensus figures show 2019 growth of 1.9% to 164.52 with 2020 growth forecast to exceed 10.4% at a final figure of 181.66. Both of these estimates are down from earlier forecasts. For example, the February 15, 2019 Earnings Insight provided a 169.53 figure for 2019 and a 188.70 figure for 2020. The current 2019 estimate is down 2.9% from the February figure while the 2020 estimate is down 3.7% from the February estimate.
The Index is currently trading in the 2,900 area so the p-e ratio on 2020 earnings is 15.9x, not cheap, but not outrageously expensive given the current interest rate environment (the ten-year Treasury bond is yielding just 1.6%).