Key Points:
In Q2 2018, 75% of S&P 500 companies beat earnings expectations. The median beat was around 4%, which was slightly lower than Q1, but at the upper end of a six-year range. There has since been no real upward revision to Q3 or full-year EPS estimates.
From 60 days ago, the median EPS revision for next quarter is actually -0.4% lower. The median full-year revision from 60 days ago is up just 0.4%
For S&P 600 companies it is similar. Median beat in Q2 was 6%, but from 60 days ago the median EPS revision for Q3 is 0.9% lower and for the full-year there has been no median revision.
Since earnings estimates have not substantially risen to reflect the upside surprise, by implication even without lowering estimates, Wall Street analysts are expecting lower for earnings growth for the rest of the year than they had entering the quarter. As a result, William O’Neil + Co. believes that Wall Street is still underestimating the earnings the S&P 500 will report for 2018.
