S/P 500 Index Earnings Growth Expected to Improve Next Year

With most of the S/P 500 Index companies having reported third quarter earnings results, we can now take an informed look at expected performance and growth. We use the FACTSET data release (November 15, 2019) to monitor the analyst consensus estimates. For the current 2019 year, the earnings estimate is $163.41, up just 1.2% from the 2018 levels. The consensus estimate for 2020, however, is for a more positive growth number of 9.5% to $178.87. The earnings forecast trends have been negative over the course of the year as the analyst community obtains more data on a quarterly reporting basis. For example, the FACTSET report for February 1, 2019, listed an earnings estimate of $189.20 for the 2020 year. The latest estimate for 2020 is just $178.87, down 5.6% from the February estimate. This trend is typical as analysts temper their earlier enthusiasm once the reported earnings data are released over the course of a year.