Unveiling the Net Income Chart from LSEG I/B/E/S: A Closer Look at Earnings Season Progression
Are you ready to dive into the world of finance with the latest insights on earnings season progression? Join me, the world’s best investment manager and financial market journalist, as we uncover the secrets hidden within the net income chart from LSEG I/B/E/S. As earnings season unfolds each quarter, we witness a fascinating “fish-hook” effect that Ed Yardeni often discusses. This effect is characterized by the S&P 500 EPS estimate starting low due to negative revisions from the previous quarter and gradually climbing as more companies report their earnings.
But that’s just the tip of the iceberg. A new player in the game, TrendSpider, presents a chart that may make you pause and question your beliefs in fundamentals versus technicals. Let’s take a closer look at how the expected tech sector EPS growth has evolved from July 1 for the upcoming quarters, from Q2 ’24 to Q2 ’25. The numbers are staggering, with significant growth expected across the board.
Next week, tech giants like Microsoft, Amazon, and META are set to report their earnings, causing ripples in the market. Keep a close eye on these companies as they have the potential to sway the tech sector estimates. And let’s not forget about Alphabet, whose EPS and revenue revisions are making waves in the industry.
But what does all of this mean for you, the average investor? In simple terms, the increased capital expenditure projections from major tech companies may not directly impact earnings per share but could affect valuations. This shift in focus from earnings to valuation could have a profound impact on stock prices in the coming quarters.
In conclusion, as Elon Musk aptly put it, sometimes building a Ferrari for every launch may not be necessary when a Honda Accord could suffice. The “capex factor” may be unfamiliar to many retail investors, but it’s crucial to understand its implications on stock prices and valuations. Remember, investing comes with risks, and past performance is not indicative of future results. Stay informed, stay vigilant, and make informed decisions based on the latest data from LSEG.