Fall 2020 Snapshot of Expected Future S&P 500 Earnings

Every three months, we take a snapshot of the expectations for future earnings in the S&P 500 (Index: SPX) at approximately the midpoint of the current quarter, shortly after most U.S. firms have announced their previous quarter's earnings.

The latest forecast for S&P 500 earnings through the end of 2020 suggests a less deep earnings recession than the forecast from the Summer 2020 snapshot, indicated a better-than-previously-expected bottom for the Coronavirus Recession. At the same time, S&P continues to project a robust recovery for earnings in 2021, although not as strong as it did three months ago.

Forecasts for S&P 500 Trailing Twelve Month Earnings per Share, September 2014-December 2021, Snapshot on 12 November 2020

The chart shows two previous earnings recessions for the S&P 500, going back to 2014. As you can see from the historic earnings per share data shown in the chart, Standard & Poor has a history of making optimistic projections, which are often revised downward. Changes in S&P's projections for 2021 will be something to watch as we get into 2021, especially with the prospects for a global double-dip recession.

Data Source

Silverblatt, Howard. Standard & Poor. S&P 500 Earnings and Estimates. [Excel Spreadsheet]. 12 November 2020. Accessed 19 November 2020.