Reporting season continues to look like a mixed bag, analysts at RBC Capital said in a client note Monday.
They acknowledged that with more than half of the S&P 500 still not yet in, these stats remain very much in flux, but said the percent of companies in the index beating consensus on EPS forecasts is still tracking a little lower than last quarter.
In addition, both EPS beats and revenue beats are tracking lower for the Russell 2000. "Within the Russell 1000, the companies posting earnings beats are outperforming the broader market slightly immediately post results in terms of their stock price reactions, but to a lesser degree than we saw last quarter," the analysts added. "The good news is that companies missing consensus EPS forecasts also aren’t underperforming as much as usual."
Furthermore, while small-cap companies posting earnings beats have been in-line performers, RBC Capital notes that the good news is companies missing consensus EPS forecasts are underperforming to a lesser degree than usual.
"2023’s S&P 500 EPS (a blend of actuals and estimates for outstanding companies) is now tracking at $223 (flat vs. 2022’s actual and up from the 2023 forecast of $221 to start the year)," the analysts said. "Meanwhile, 2024’s S&P 500 EPS forecast is now tracking at $243 – down from the forecast of $245 a few weeks ago."
The anticipated growth rate for 2024 EPS is now tracking at just 9% vs. 11% a few weeks ago. RBC has been expecting some downward revisions to 2024’s bottom-up consensus EPS forecasts.