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S&P 500 1Q19 Earnings Recap: Consumer and Communications Stocks Lead While Energy and Utilities Stocks Lag

May 13, 2019

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All Data and Information as of 05/13/2019 Market Open

 

  • First quarter earnings season for the S&P 500 Index is winding down near its close this week with 450 S&P 500 constituents having reported quarterly earnings as of today’s market open. So far in this earnings season, the 450 S&P 500 companies to report earnings have generated an average EPS beat of 6.34% while quarterly sales have fallen in line with analyst estimates, as can be seen in the chart below.
     
  • In the remainder of this week, 8 S&P 500 companies will report quarterly financials including notables such as Nvidia (NVDA), Walmart (WMT), and Macy’s Inc. (M).

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
 

  • Purely from a growth perspective, the S&P 500 Communication Services Sector and the S&P 500 Health Care Sector appear to be outperforming in this earnings season. Both sectors have seen 95.2% of their constituents report quarterly earnings; S&P 500 health care stocks have generated the best sales growth among S&P 500 sectors of 13.95% while S&P 500 communication services stocks have generated the best EPS growth among S&P 500 sectors of 13.59%.  
     
  • A look strictly at earnings results of S&P 500 companies reveals that the consumer discretionary stocks are leading S&P 500 sectors in expanding their bottom-line. S&P 500 consumer discretionary stocks have generated the best EPS surprise among S&P 500 sectors of 20.53% while their aggregate earnings growth of 11.03% is the second-best among S&P 500 sectors.
     
  • It is worth noting, however, that the S&P 500 Consumer Discretionary Sector Index is the least reported on sector in the S&P 500 with just 63.5% of constituents having announced first quarter earnings.

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
 

  • In terms of reporting results ahead of analyst expectations, S&P 500 materials stocks are leading S&P 500 sectors. The S&P 500 Materials Sector Index has generated an average sales surprise of 3.35% this earnings season, the best among S&P 500 sectors, while the index’s aggregate EPS surprise of 14.81% is the second-best among S&P 500 sectors.
     
  • However, the S&P 500 Materials Sector Index’s average sales growth of –2.93% and average earnings growth of –16.92% is the worst and second-worst among S&P 500 sectors, respectively.

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
 

  • It appears that energy and utilities stocks are reporting the worst results overall this earnings seasons among S&P 500 sectors.
     
  • The S&P 500 Energy Sector Index’s average earnings growth of –24.85% paired with an average EPS surprise of 0.25%, both of which are the worst among S&P 500 sector indices, combine to form poor results for S&P 500 energy stocks.  
     
  • S&P 500 utilities stocks, meanwhile, have generated the worst sales surprise of –2.37% among S&P 500 sectors this earnings season while their average EPS surprise of 1.82% is the second-worst among S&P 500 sectors.

 

 

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