Earnings Estimates Still Stand At +10% For 2022

Earnings Estimates Still Stand At +10% For 2022
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In his Daily Market Notes report to investors, while commenting on earnings estimates, Louis Navellier wrote:

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Day of Stability?

The market is getting a welcome respite from huge market swings this morning.

Later today, however, notes from the latest Fed meeting will be released which may inject volatility, as investors remain hopeful that the Fed’s bark is worse than its bite, that the “Fed Put” may still linger in the shadows and that they will ease the speed of their monetary tightening plans if the economy starts to slow significantly.  These hopes are far more likely if we do see real evidence of peak inflation.

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Q1 2022 hedge fund letters, conferences and more

As of yesterday’s close, the year-to-date standing is the Dow -12.1%, S&P -17.3%, and the NASDAQ -28%.

Positive Estimates

While the recent earnings releases of retailers have brought rising concerns about margin squeeze, with 1Q22 S&P margins coming in at 12.1% after the previous 3 quarters were in the mid-13%, overall earnings estimates still stand at +10% for 2022, and another +10% for 2023, though skewed by soaring energy trends.

This morning Dick’s Sporting Goods (NYSE:DKS) reported a beat on top and bottom but guided down full-year estimates, making the high the previous low. The stock traded down hard pre-market, hitting a 52-week low, but has since rebounded to a 6% gain as the earnings call proceeded.

Last night, Nordstrom (NYSE:JWN) reported good numbers and guidance. The stock is up today.

Earnings Driven Market

The consumer seems willing to spend, and the problems appear to be more one of product mix at various retailers and over-ordering due to logistics uncertainties. Other current trends remain with energy inching higher and interest rates subdued.

As the morning progresses, the market creeps higher as the sell-off has produced some attractive entry points.

Tonight, NVIDIA (NASDAQ:NVDA) reports, which will be telling for the semiconductor sector and tomorrow hopes are high for strong results from Costco (NASDAQ:COST).

Earnings are driving the market, as they should.  Stay focused on companies that continue to find a way to grow sales and protect strong margins.

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Updated on May 25, 2022, 1:04 pm

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