S&P operating earnings estimates as posted by S&P for ‘08 and ’09.
Operating earnings estimates continued their downward slide, accelerating this past week as reports poured in. The 2009 estimates, IMO are not to be believed. They project a 193.1% earnings growth in financials. Want to buy land in Florida?
Report Dt 2008 2009
08/07/2007 106.59 <-------2008 high
…
01/14/2008 100.32
01/22/2008 99.21
01/29.2008 99.00
02/05/2008 99.86
02/12/2008 99.51
02/19/2008 98.99
02/26/2008 98.63
03/04/2008 96.55
03/11/2008 96.71
03/18/2008 96.42
03/25/2008 96.26
03/31/2008 96.74
04/10/2008 96.79 115.42
04/16/2008 93.62 113.30
04/22/2008 92.31 112.17
04/28/2008 91.69 111.81
05/06/2008 90.91 110.29
05/13/2008 89.43 110.44
05/20/2008 89.29 109.53
05/27/2008 89.07 108.98
06/03/2008 89.27 109.04
06/10/2008 89.38 110.19
06/16/2008 89.03 109.94
06/24/2008 88.04 108.98
06/30/2008 87.83 108.77
07/08/2008 87.83 108.24
07/15/2008 86.73 108.22
07/22/2008 83.84 108.60
.
At Brinkers 16 to 17 times operating earnings, applying it to the S&P 7/22 estimate places the value for 2008 now at 1341 to 1425, and 2009 at 1738 to 1846. (FYI, the 2006 actual earnings were 87.72 and 2007 actual earnings were 82.54)
.
Bob last projected 1600 near the end of ’08 or into ’09. On 4/6/08, he stated on the show that he expected record highs near the end of ’08, which means 1565.15 on a closing basis, as Bob mentioned this number on his show. On the 7/26/08 show he stated “Would the market get to new all-time-highs within your time-frame of 1 to 3 years? Yeah. For me, my opinion on that would be -- without question."
.
Brinker said on Saturday April 5, 2008: “My number for the S&P 500 for 2008 is way below, way below the Wall Street number for 2008.” LOL, see
.
Bob Norton's Evergreen was last reported July 1, …an average recessionary profit pullback indicates that earnings could be as low as $77.50 next year. Low interest rates and 4% inflation suggest to us that the market will likely trade within a volatile range of 1225-1350 during the next twelve months.”
And also,
“In our last Quarterly Market Outlook, we projected that the market (S&P 500) would likely trade within a range of 1250-1450 for the remainder of 2008. After climbing to 1425 in mid-May, stocks have since backed-off to the lower end of our trading range and are unlikely to once again push through the upper end as consensus profit expectations for 2008 and 2009 are too high, in our opinion, and are expected to plunge in the months and quarters ahead. Since the S&P 500 is approaching bear market territory (1250 represents a 20% drop from last October's high of 1550) it appears the market is already discounting the prospects for recession in early 2009. Huge sums of cash on the sidelines, low sentiment levels, and stimulus-fueled economic gains may help set the stage for a second half rebound to the 1350 area. Downside support is in the 1225 range.”
John Mauldin commented in "Outside the Box" that : "As if this wasn't bad enough, in the past we have shown that analysts tend to be around about 10% too optimistic in their year-ahead forecasts of the earnings level. However, in recession years this jumps to 30% too optimistic. "
See Normxxx’s interesting posting “The Real P/E Ratio”
