Summary
The 4Q23 EPS season gets under way later this week, launched, as usual by the earnings reports from the big banks. In the following week, the floodgates will open with Consumer, Healthcare, and Industrial companies all releasing results. Tech and Energy companies generally report later in the EPS period, and then the Retailers wrap things up, likely in mid-to-late February. Consensus estimates for 4Q23 growth range from low-single-digits to mid-single-digits. This follows 7.5% growth in 3Q EPS, according to Refinitiv. Energy could once again be a wild card this quarter. Although Energy represents only about 5% of S&P market capitalization, 3Q23 S&P 500 earnings less Energy rose at a 13% clip year-over-year. For 2023, our full-year earnings estimate is $226, implying low-single-digit growth from 2022 levels. Following low-single-digit EPS declines for 1Q23 and 2Q23 EPS, along with the rebound in 3Q, we look for another quarter of EPS growth in 4Q and at a high-single-digit rate against a weak year-earlier comparison. Remember, last quarter, just over four-fifths of companies exceeded consensus expectations; and the average beat against expectations was above 7%. Over the preceding decade, about 75% of S&P 500 companies exceeded expectations; and those companies, on average, topped consensus quarterly EPS estimates by about 6%.
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Source: finance.yahoo.com