Companies and analysts love to lower earnings expectations to make them more beatable; over the past five years, 73 percent of S&P 500 companies have beaten their estimates. Everyone knew first-quarter earnings would be bad this year because of the COVID-19 pandemic, but nevertheless, they’ve been beating forecasts by the lowest rate in at least 10 years.
According to J.P. Morgan, only about 65 percent of the companies that have already reported results are beating estimates. That would be the lowest beat ratio since the 2008 financial crisis.
In aggregate, earnings are missing consensus estimates by about 0.5 percent, according to Credit Suisse, That is primarily because of a 22.3 percent miss by the financial sector. Over the past five years, by contrast, the average aggregate earnings beat is 4.9 percent,
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