blog

Latest from the Quantamize Blog

The Beats Go On! Earnings Continue to Beat Expectations, Consumer Staples Outperform While Utilities Lag

Apr 29, 2019

Better Data for Better Investment DecisionsBetter Data for Better Investment Decisions
Better Data for Better Investment DecisionsBetter Data for Better Investment Decisions

 

All Data and Information as of 04/29/2019 Market Open

 

  • So far, it has been a stellar earnings season, with stocks flirting with record levels!  The beats go on for sure!
  • Today we provide a recap of S&P 500 first quarter earnings season with bottom-line beats from a majority of the index constituents. Over this entire week, 142 S&P 500 companies are expected to report quarterly financials including notables such as Alphabet Inc. (GOOG.L), S&P Global Inc. (SPGI), and Kellogg Company (K).
     
  • So far in first quarter earnings season, 231 S&P 500 companies, or 46.2% of the US benchmark index, have reported financials. The 231 S&P 500 constituents to report financials have generated an average EPS surprise of 2.79% while revenue has trailed analyst estimates by an aggregate 0.89%.

S&P 500 CY1Q2019 Earnings Release Sector Breakdown

  Average Sales Surprise Average EPS Surprise  Average Sales Growth Average Earnings Growth Number Reported Number in Index
S&P 500 CONS DISCRET INDEX -0.04% 5.39% 3.71% 2.06% 22 64
S&P 500 CONS STAPLES INDEX -0.28% 27.02% 6.77% 23.75% 16 33
S&P 500 INFO TECH INDEX -0.15% 3.27% 3.41% 0.91% 25 68
S&P 500 FINANCIALS INDEX 0.38% 7.40% 1.88% 0.25% 50 68
S&P 500 HEALTH CARE INDEX 1.19% 4.68% 1.11% 1.77% 26 62
S&P 500 INDUSTRIALS INDEX 1.52% 3.54% 9.16% 7.96% 43 69
S&P 500 ENERGY INDEX -0.87% 1.86% 4.73% 2.26% 12 30
S&P 500 UTILITIES INDEX -0.93% -8.42% -5.36% -35.00% 7 27
S&P 500 MATERIALS INDEX -1.72% 7.60% 1.68% 11.61% 12 25
S&P 500 COMM SVC INDEX -3.11% 4.01% -4.33% -18.04% 8 22
S&P 500 REAL ESTATE INDEX -0.38% 8.79% 13.72% 13.38% 10 32
Total S&P 500 Index -0.89% 2.79% -0.62% 1.05% 231 500

Source: Bloomberg
 

  • The S&P& 500 Consumer Staples Index appears to be having the best earnings season with 16 index constituents, or 48.5% of the index, reporting quarterly financials.
     
  • S&P 500 consumer staples stocks look extremely strong during the first quarter, at least from a bottom-line perspective, with the sector generating an average EPS surprise of 27.02% and average earnings growth of 23.75%. The S&P 500 Consumer Staples Index is the top performing S&P 500 sector in both of these metrics. 
     
  • From a top-line perspective, however, S&P 500 consumer staples stocks are underperforming analyst expectations. The average S&P 500 consumer staples stock has generated sales growth of 6.77% and missed the consensus analyst sales estimate by 0.28%.

S&P 500 Sector Index Multiples, Yields, and Projected EPS Growth

  Fwd 12M P/E Ratio T12M P/E Ratio T12M EBIT/EV T12M FCF Yield FWD 12M EPS Growth (%) 3 Year Fwd EPS CAGR
S&P 500 CONS DISCRET INDEX 21.03x 24.08x 4.18% 3.88% 14.51% 12.14%
S&P 500 CONS STAPLES INDEX 19.06x 20.02x 4.89% 3.86% 5.04% 5.24%
S&P 500 INFO TECH INDEX 19.45x 21.88x 5.39% 4.73% 12.48% 9.93%
S&P 500 FINANCIALS INDEX 12.19x 13.66x 7.63% 8.24% 12.07% 8.53%
S&P 500 HEALTH CARE INDEX 14.96x 19.87x 4.51% 4.52% 32.83% 15.86%
S&P 500 INDUSTRIALS INDEX 16.26x 17.77x 5.12% 3.25% 9.29% 9.17%
S&P 500 ENERGY INDEX 16.58x 16.75x 5.89% 3.64% 1.02% 6.41%
S&P 500 UTILITIES INDEX 18.26x 19.33x 4.00% -1.60% 5.84% 4.86%
S&P 500 MATERIALS INDEX 16.36x 14.38x 6.15% 3.22% -12.07% 2.10%
S&P 500 COMM SVC INDEX 17.40x 20.29x 4.83% 3.93% 16.62% 11.81%

Source: Bloomberg
 

  • The S&P 500 Industrials Index is performing well overall this season with 43 constituents, or 62.3% of the index, announcing their quarterly financials -- this makes the S&P 500 Industrials sector the second-most reported on S&P 500 sector so far in this earnings season.
     
  • The S&P 500 industrials sector has generated an average sales surprise of 1.52% so far in this earnings season, the best among S&P 500 sectors. S&P 500 industrials stocks to report so far observed average sales growth of 9.16% in the first quarter, the second-best sales growth among S&P 500 sectors.  
     
  • S&P 500 industrials stocks also have generated bottom-line EPS beats that are in-line with S&P 500 sectors. The 43 S&P 500 industrials stocks to report quarterly financials so far have observed average earnings growth of 7.96% which amounts to an aggregate EPS surprise of 3.54%.

S&P 500 Sector Index ROE Dupont Breakdown

  T12M ROE T12M Operating Margin T12M Net Profit Margin T12M Sales / Assets Assets / Equity
S&P 500 CONS DISCRET INDEX 28.14% 8.06% 6.16% 1.02x 4.33x
S&P 500 CONS STAPLES INDEX 24.10% 8.62% 6.50% 1.12x 3.21x
S&P 500 INFO TECH INDEX 34.35% 23.86% 20.53% 0.57x 2.83x
S&P 500 FINANCIALS INDEX 10.46% 21.16% 16.36% 0.07x 8.13x
S&P 500 HEALTH CARE INDEX 15.37% 8.93% 6.54% 0.82x 2.77x
S&P 500 INDUSTRIALS INDEX 21.39% 10.51% 7.31% 0.69x 3.91x
S&P 500 ENERGY INDEX 9.85% 9.14% 7.03% 0.72x 1.84x
S&P 500 UTILITIES INDEX 8.68% 16.98% 9.96% 0.23x 3.59x
S&P 500 MATERIALS INDEX 11.80% 11.35% 7.60% 0.61x 2.39x
S&P 500 COMM SVC INDEX 16.11% 18.46% 14.04% 0.43x 2.53x

Source: Bloomberg
 

  • The S&P 500 Utilities Index is having by far the worst earnings season so far, although it is the least reported on S&P 500 sector with just 7 constituents reporting quarterly financials, or 25.9% of the index.
     
  • The 7 utilities stocks in the S&P 500 have reported a dismal aggregate slowdown in earnings of 35.00% with the average company to report observing an EPS miss of 8.42% -- both of these are the worst among S&P 500 sectors.  
     
  • S&P 500 utilities stocks do not look much better from a sales perspective with the average constituent reporting a 5.36% slowdown in its top-line, amounting to an aggregate sales miss of 0.93%.

 

 

Global Top Stock IdeasTOP LONG & TOP SHORT STOCK IDEAS FOR GLOBAL MARKETSMONTHLY TOP IDEAS FROM OUR MULTI-FACTOR QUANTITATIVE MODELS
Global Top Stock IdeasTOP LONG & TOP SHORT STOCK IDEAS FOR GLOBAL MARKETSMONTHLY TOP IDEAS FROM OUR MULTI-FACTOR QUANTITATIVE MODELS