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Zacks Earnings Trends Highlights: Meta, Alphabet and Nvidia
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Zacks Director of Research Sheraz Mian says, “Had it not been for the continued pressure on Energy sector estimates, the revisions trend for Q3 for the S&P 500 index would be modestly positive since the start of the period.”
Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>
We have regularly been flagging the steady improvement in the revisions trend since the start of Q2, which has become more entrenched in recent months. We have to look below the index level to appreciate the cross current in estimates at the sector levels.
The aggregate Q3 earnings estimate for the S&P 500 index has declined about -1% since the start of the period, with rising estimates for six sectors, including Tech, offsetting continued weakness of varying magnitudes in the remaining sectors.
Had it not been for the continued pressure on Energy sector estimates, the revisions trend for Q3 for the S&P 500 index would be modestly positive since the start of the period.
In addition to the Tech sector, Q3 estimates have moved higher for the Construction, Autos, Medical, Retail, and Industrials sectors.
For the Tech sector, you can see this favorable revisions trend in estimates for operators like Meta Platforms META, Alphabet GOOGL, Nvidia NVDA and others.
The magnitude of positive revisions that Nvidia is experiencing is in a league of its own.
But the gains in estimates at Alphabet, Meta, and others are as material and indicative of the overall improving earnings outlook.
As you can see from these quarterly earnings-growth expectations, the long-feared recession doesn’t show up in this near-term earnings outlook. A big-picture view of corporate profitability on a long-term basis doesn’t leave much room for a recession either.
Given the emerging consensus on the ‘soft-landing’ outlook for the economy, one can expect this favorable turn in the overall earnings picture to strengthen further as companies report Q3 results and share trends in underlying business.
NVIDIA Corporation (NVDA): Free Stock Analysis Report
Alphabet Inc. (GOOGL): Free Stock Analysis Report
Meta Platforms, Inc. (META): Free Stock Analysis Report
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