Huge Expectations

We’ll monitor this as we roll along the data array updates over the next several weeks of update batches. But the early returns do show quite a bump in expectations for 2018 and 2021.

Observations

  • This is a work-in-progress. Think of it like “exit polling” with 30% of “precincts” reporting as we’ve logged the forecasts for 2018 and 2021 for issues 1-4 so far.
  • The sales bump for 2018 is significant and material. It will be interesting to see if it persists.
  • The long term growth trend has been “bent” back to 3.5-4.0% with the optimism. As shown, growth in the “New Normal” has been pretty close to zero.
  • The recessionary conditions for 2015-2016 become a little more obvious here. Although not an official recession, profitability lagged for many companies in recent years. We also see the traditional Value Line analyst optimism in the 3-5 year forecasts for net margin.
  • Average P/E forecasts for 2017 seem a little elevated but not as much as we read and hear from the pundits. If the exuberant forecasts from the rhinos materialize, the burst of EPS (E) will do a lot for the P/E equation. We also note that the 3-5 year P/E forecasts are not “outlandish” and suggest at least a semblance of moderation for the long term outlook, company by company.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s