For the Q4 as a whole, total earnings are expected to be up +8.8% from the same period last year on +6.9% higher revenues. The revisions trend for Q4 estimates has been very favorable, with earnings estimates holding up a lot better relative to other comparable periods. Earnings growth is expected to be positive for 13 of the 16 FATI sectors, with double-digit growth for the Energy, Technology, Construction, Industrial Products, Basic Materials and Autos sectors.
Q4 earnings growth for the Energy sector is the highest of all sectors, with total earnings for the sector expected to be up +174.9% from the same period last year on +23.7% higher revenues. Excluding the Energy sector, total Q4 earnings for the rest of the S&P 500 index would be up +6.2%. Earnings growth is expected to be strong for the Technology sector, with total Q4 earnings for the sector expected to be up +14% on +8.5% higher revenues. Finance sector earnings are expected to be up +3.5% on +2.3% year-over-year growth in revenues. Earnings growth is expected to be negative for three sectors in Q4 – Consumer Discretionary, Conglomerates and Transportation.
The big banks will most likely be taking headline-grabbing charges related to the impact of tax law changes on deferred tax assets and the ‘deemed’ repatriation of foreign earnings; the latter being a factor in Tech sector earnings. But all of these will be one-time non-cash charges that will have no bearing on core earnings.
For full-year 2017, total earnings for the S&P 500 index are expected to be up +7.7% on +5.3% higher revenues. Index earnings are expected to be up +12.3% in 2018 and +9.6% in 2019.
Earnings expectations do not reflect any tax law changes at this stage. Given the direct and indirect favorable impact of tax cuts on corporate profitability, estimates will most likely be going up following the enactment of the legislation.
Featured Recommendation
Reinsurance Group of America Corp. $163.65 (RGA)
Reinsurance Group of America, Inc. is primarily engaged in life reinsurance and international life and disability insurance on a direct and reinsurance basis. In addition, the company provides reinsurance of non-traditional business including asset-intensive products and financial reinsurance.
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. Target Price $180.02
FATI® Market Rankings
Ranking
Market Cap
1 Mth
3 Mth
6 Mth
9 Mth
12 Mth
RSR
% Stocks Up
% Stocks Dwn
YTD Return
1
Small Caps
4.0%
7.0%
14.0%
21.0%
22.0%
4
12.0%
28.0%
2
Mega Caps
4.0%
7.0%
12.0%
18.0%
22.0%
4
11.0%
33.0%
3
Micro Caps
6.0%
6.0%
11.0%
18.0%
18.0%
4
15.0%
26.0%
4
Large Caps
4.0%
7.0%
12.0%
18.0%
22.0%
4
12.0%
39.0%
5
Mid Caps
4.0%
7.0%
12.0%
18.0%
20.0%
4
12.0%
30.0%
6
Nano Caps
5.0%
7.0%
10.0%
14.0%
12.0%
3
20.0%
23.0%
FATI® S&G Index
3.97%
FATI ® Sector Rankings
Sector
1 Mth
3 Mth
6 Mth
9 Mth
12 Mth
RSR
% Groups Up
% Groups Dwn
YTD Return
Basic Materials
9%
15%
27%
27%
24%
7
20.0%
40.0%
Oil & Energy
13%
14%
17%
11%
2%
7
0.0%
42.0%
Construction
6%
16%
23%
28%
32%
6
0.0%
0.0%
Industrial Products
8%
9%
15%
26%
23%
5
16.0%
33.0%
Retail/Wholesale
4%
15%
14%
13%
11%
5
0.0%
50.0%
Aerospace
5%
6%
18%
33%
35%
5
0.0%
0.0%
Auto/Tire
7%
6%
19%
33%
29%
5
0.0%
100.0%
Transportation
7%
10%
14%
19%
18%
5
0.0%
0.0%
Business Services
6%
5%
9%
8%
4%
4
0.0%
0.0%
Consumer Discretionary
2%
9%
12%
19%
22%
3
50.0%
0.0%
Medical
5%
7%
8%
22%
27%
3
0.0%
66.0%
Multi-Conglomerates
4%
6%
9%
20%
17%
3
0.0%
100.0%
Computer/Tech
3%
5%
10%
22%
27%
2
0.0%
28.0%
Finance
2%
3%
7%
12%
12%
2
0.0%
71.0%
Consumer Staples
0%
6%
5%
8%
12%
2
0.0%
33.0%
Utilities
-4%
-4%
1%
3%
7%
-1
50.0%
50.0%
FATI® S&G Index
3.97%
Long Trades
Ticker
%Chg EPS F1
EPS Grth % F1
EPS Grth % F2
# Anlst in F1 Con. Est.
P/E using F1 Est
Mkt Cap Millions
FATI Score
Next EPS Report Date
Market
SPX
0
37.4
48.22
2
19.08
0.97
Large Cap
MFC
3.55
38.78
44.22
5
10.69
$43,159
3.6
20180207
PFG
5.29
29.82
38.83
3
12.56
$21,428
1.7
20180129
RGA
13.52
26.31
36.11
3
13.34
$10,561
1.57
20180129
Mid Caps
EWBC
10.18
42.5
56.13
9
15.91
$9,731
4.87
20180125
KAR
1.96
26.09
46.36
8
20.51
$7,206
4.44
20180220
SNV
17.19
69.04
78.28
10
15.23
$6,090
4.37
20180123
MTG
18.8
45.2
61.28
4
10.52
$5,603
4.11
20180118
FII
22.19
34.98
37.93
4
12.83
$3,546
3.29
20180125
FCFS
2.76
33.71
55.12
4
21.59
$3,324
1.9
20180201
PLCE
4.34
44.84
57.02
4
20.13
$2,755
0.3
20180314
ONB
6.71
23.65
37.78
6
14.17
$2,494
4.06
20180123
FCB
14.77
59.67
89.27
4
15.18
$2,446
3.66
20180123
TRMK
12.15
28.97
36.28
4
15.4
$2,288
2.8
20180123
Short Trades
Ticker
%Chg EPS F1
EPS Grth % F1
EPS Grth % F2
# Anlst in F1 Con. Est.
P/E using F1 Est
Mkt Cap Millions
FATI Score
Next EPS Report Date
Market
SPX
0
37.4
48.22
2
19.08
0.97
Mid Caps
KEX
-3.47
-8.47
4.96
5
31.19
$4,465
6.8
20180131
Small Caps
EGOV
-1.25
-5.95
-9.52
4
22.09
$1,156
3.43
20180131
GREEN – Favored Stock
RED – EPS Report ALERT
FATI Score– Measures the dispersion of earnings estimates of analysts. The lower the score the the lower the earnings uncertainty. Scores of 12 or lower are only considered for long trades.
