Future Corporate Earnings

by | Dec 23, 2021 | General

The signal in a sea of noise

In September we wrote about how despite all the bad news, estimates for future earnings continued to rise. Now that we’re rounding out 2021 and there’s even more bad news, what are the prospects for 2022 and beyond? 

Below is an updated version of the chart we sent in September. The vertical dashed line shows what future S&P 500 earnings estimates were at that time, and how they’ve changed since. 

Each line represents the estimates for a single year: 2021 through 2023. Earnings are expected to rise over the next two years from just over $200 per share to $248 per share in 2023.

Corporate earnings have remained strong despite fears of inflation, Covid variants, and political discordance. This may shock people, but it’s largely been the same story for more than a decade. 

The value of the stock market is based on the profits of real operating businesses.  When the profits of those companies continue to increase, we shouldn’t be surprised when the stock market eventually follows suit. 

Happy Holidays from the team at Dock Street! 

Best regards,

Evan McGoff

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