All About Earnings

More record highs for S&P 500 companies’ revenues and earnings are projected for this year, by industry analysts and us. The estimates suggest a profit margin approaching 13%. Applying a prospective P/E of 20 to our earnings projections results in our S&P 500 price index targets of 5400 by year-end 2024 and 6000 by year-end 2025. … Just eight stocks account for more than one-fourth of the S&P 500’s capitalization; our forecasts assume that the MegaCap-8 will continue to inflate the index’s earnings, revenues, profit margin, and valuation. … Also: While analysts’ estimate revision activity remains negative, cutting more estimates than they’re boosting, Joe reports that the rate of decline is slowing.