Tuesday, November 7, 2017

The Case for Optimism

Wall Street’s earnings forecasts are holding up better than they have in years. Analysts usually start out the year too optimistic, but they have cut their full-year earnings estimates for S&P 500 companies by only 1.5 percent so far this year, the smallest downward revision since 2011.

By this time last year, earnings forecasts had come down by roughly 7 percent, according to FactSet data. All told, analysts now see per-share earnings for S&P companies rising roughly 10 percent in 2017 from a year earlier, FactSet reports.

Tech remains a huge driver of that. Analysts are now expecting tech-sector profits will rise 14 percent this year, compared to expectations for an 11 percent increase a month ago. The double-digit earnings growth for the sector accounts for more than 20 percent of the S&P’s overall market value.

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