Chapter 13 Charts: Predicting Corporate Earnings

Predicting the Markets: Chapter 13 Charts:

Predicting Corporate Earnings

Yardeni Research, Inc.

November 18, 2022

Dr. Edward Yardeni

Chief Investment Strategist

Mali Quintana

Senior Economist info@

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Table Of Contents Table Of Contents

Predicting Corporate Earnings

1-24

November 18, 2022 / Chapter 13 Charts: Predicting Corporate Earnings

Yardeni Research, Inc.



Predicting Corporate Earnings

Figure 1.

339700

350 330 310

S&P 500 OPERATING EARNINGS PER SHARE (analysts' consensus estimates, I/B/E/S data in dollars, monthly, ratio scale)

290

270

250

230 210

Analysts' Estimates

190

Annual*

170

12-month forward**

20 21 19

150

Actual 4Q sum***

18

130 110

09 08

15 16 17 13 14 12

90

07 06

11 10

70

99 00 01 02 03 04 05

50

98 97

96 95

390 350

310

270

Oct

230

190

150

110

70



30

30

95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

* "Squiggles" span 25 months from February to February. ** Time-weighted average of analysts' consensus estimates for S&P 500 operating earnings per share for current year and next year. *** Actual 4Q sum from I/B/E/S.

Note: Shaded areas are recessions according to the National Bureau of Economic Research. Source: I/B/E/S data by Refinitiv.

Figure 2.

45

45

S&P 500 OPERATING EARNINGS PER SHARE

40

(analysts' consensus estimates, I/B/E/S data in dollars, monthly, ratio scale)

40

95

35

Analysts' Estimates

30

Annual*

94

35

91

92

93

90

30

12-month forward**

25

Actual 4Q sum***

89

25

88

85

86

87

82 83

20

20

84

81

15

80

15



10

10

1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995

* "Squiggles" span 25 months from February to February. ** Time-weighted average of analysts' consensus estimates for S&P 500 operating earnings per share for current year and next year. *** Actual 4Q sum from S&P until Q4-1993, then from I/B/E/S.

Note: Shaded areas are recessions according to the National Bureau of Economic Research. Source: I/B/E/S data by Refinitiv.

Page 1 / November 18, 2022 / Chapter 13 Charts: Predicting Corporate Earnings

Yardeni Research, Inc.



Predicting Corporate Earnings

Figure 3.

270

250

S&P 500 OPERATING EARNINGS PER SHARE

230

(analysts' consensus estimates, I/B/E/S data in dollars, weekly, ratio scale)

210

190

20

21

170

19

150

18

130

15

16

17

14

13

110

12

11 90

10

70

Analysts' Estimates Annual* 52-week forward** Actual 4Q sum***

09

270 250 Q131/21300 210 190 170 150 130

110

90

70

50 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

* "Squiggles" span 25 months from February to February. ** Time-weighted average of analysts' consensus estimates for S&P 500 operating earnings per share for current year and next year. *** Actual 4Q sum from I/B/E/S.

Note: Shaded areas are recessions according to the National Bureau of Economic Research. Source: I/B/E/S data by Refinitiv.

Figure 4.

120

S&P 500 OPERATING EARNINGS PER SHARE

110

(analysts' consensus estimates, I/B/E/S data in dollars, weekly, ratio scale)

08

100

90

Analysts' Estimates

Annual*

52-week forward**

80

Actual 4Q sum***

07 06

50

2021 2022

120 110 100 90 80

70

05

70

01

02

03

04

60

00

60

50

99

50

98

40 1998

1999

2000

2001

2002

2003

2004

2005

2006

40

2007

2008

* "Squiggles" span 25 months from February to February. ** Time-weighted average of analysts' consensus estimates for S&P 500 operating earnings per share for current year and next year. *** Actual 4Q sum from I/B/E/S.

Note: Shaded areas are recessions according to the National Bureau of Economic Research. Source: I/B/E/S data by Refinitiv.

Page 2 / November 18, 2022 / Chapter 13 Charts: Predicting Corporate Earnings

Yardeni Research, Inc.



Predicting Corporate Earnings

Figure 5.

40

40

S&P 500 OPERATING EARNINGS: ANALYSTS' CONSENSUS ESTIMATES: 1980-2020*

30

(I/B/E/S data)

30

(25-month percent change)

20

20

9.4 8.7 2.4 8.8 8.3 8.2 5.0 2.4 10.1

10

10

0

0

-8.8 -32.3 -45.6

-6.9 -7.8

-5.8 -11.3 -13.0

-4.0 -5.9 -25.4

-4.8 -5.2 -16.0 -11.3 -5.3 -14.9

-6.3 -20.9 -35.3 -26.2

-15.1 -5.4

-10

-10

-11.0 -38.9

-30.9 -11.6

-31.7 -26.4 -19.3

-20

-20

-30

-30

-33.2 -29.9

-40

-40

-50

-50



-60

-60

80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

* Percent change in analysts' consensus estimates for S&P 500 operating earnings per share for each year shown from initial forecast to actual, e.g., from February 1979 to February 1981 for calendar year 1980. Source: I/B/E/S data by Refinitiv.

Figure 6.

30

30

S&P 500 NET EARNINGS REVISIONS*

(percent, three-month basis)

20

20

10

10

0

0

-10

-10

Oct

-20

-20

-30

-30

-40

-40



-50

-50

85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

* Three-month moving average of the number of forward earnings estimates up less number of estimates down, expressed as a percentage of the total number of forward earnings estimates. Note: Shaded areas are recessions according to the National Bureau of Economic Research. Source: I/B/E/S data by Refinitiv.

Page 3 / November 18, 2022 / Chapter 13 Charts: Predicting Corporate Earnings

Yardeni Research, Inc.



Predicting Corporate Earnings

Figure 7.

280

250 220

S&P 500 OPERATING PER SHARE (I/B/E/S data in dollars, ratio scale)

190

160

130

100

Earnings Per Share

Operating** (4Q sum) (222.8)

70

Forward* (229.9)

40

280 250 Q113/10 220 190 160 130 100

70

40



10

10

86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

* Time-weighted average of consensus estimates for current year and next year. Monthly through March 1994, then weekly. ** Actual 4Q sum from S&P until Q4-1993, then from I/B/E/S.

Note: Shaded areas denote recessions according to the National Bureau of Economic Research. Source: I/B/E/S data by Refinitiv.

Figure 8.

280

250 S&P 500 OPERATING PER SHARE: FORWARD & ACTUAL

220

(I/B/E/S data in dollars, ratio scale)

190

160

130

Earnings Per Share

100

Operating Earnings**

(4Q sum)

70

Forward Earnings*

(pushed 52-weeks ahead)

280

250

Q3 11/9

220

190

160

130

100

70

40

40



10

10

86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

* Time-weighted average of consensus estimates for current year and next year. Monthly through March 1994, then weekly. ** Actual 4Q sum from S&P until Q4-1993, then from I/B/E/S.

Note: Shaded areas are recessions according to the National Bureau of Economic Research. Source: I/B/E/S data by Refinitiv.

Page 4 / November 18, 2022 / Chapter 13 Charts: Predicting Corporate Earnings

Yardeni Research, Inc.



Predicting Corporate Earnings

Figure 9.

5750

5500 S&P 500 STOCK PRICE INDEX, FORWARD EARNINGS & VALUATION 5250 (monthly)

5000

x24

5750

5500

x22

5250

5000

4750

4750

4500

4500

4250

S&P 500

4000

Index

3750

Blue Angels

3500

Implied Index*

3250

x18

4250

4000

Oct

3750

3500

x14

3250

3000

3000

2750

2750

2500 2250

2500

x10

2250

2000

2000

1750

1750

1500

1500

1250

1250

1000

1000

750

750

500

500

250

250

0

0

79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

* Implied price index calculated using forward earnings times forward P/Es. Source: Standard & Poor's and I/B/E/S data by Refinitiv.

Figure 10.

***** Chart Not Available ***** Task: PTMBLOGSP500WFE_BB Invalid calculation element [PRC]

10-05-2022 - 03:24:45

Page 5 / November 18, 2022 / Chapter 13 Charts: Predicting Corporate Earnings

Yardeni Research, Inc.



Predicting Corporate Earnings

Figure 11.

72.05

60.05

48.05 S&P 500 REPORTED EARNINGS PER SHARE*

36.05

(dollars, quarterly, ratio scale)

24.05

12.05

72.05 60.05 Q3 48.05 36.05 24.05

12.05



.05

.05

35 40 45 50 55 60 65 70 75 80 85 90 95 00 05 10 15 20 25

* Q4-2008 not shown because of large negative value. Note: Shaded areas are recessions according to the National Bureau of Economic Research. Source: Standard & Poor's.

Figure 12.

65

60

S&P 500 OPERATING & REPORTED EARNINGS PER SHARE (S&P data)

55

(dollars, quarterly)

50

65

60

55

Q3

50

45

45

40

40

35

S&P 500 Earnings

35

Operating (S&P data)

30

Reported (S&P data)

30

25

25

20

20

15

15

10

10

5

5

0

0

-5

-5

-10

-10

-15

-15

-20

-20



-25

-25

88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Note: Shaded areas are recessions according to the National Bureau of Economic Research. Source: Standard & Poor's.

Page 6 / November 18, 2022 / Chapter 13 Charts: Predicting Corporate Earnings

Yardeni Research, Inc.



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