By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Next Gen Econ
  • Home
  • News
  • Personal Finance
    • Credit Cards
    • Loans
    • Banking
    • Retirement
    • Taxes
  • Debt
  • Homes
  • Business
  • More
    • Investing
    • Newsletter
Reading: 2Q24 Earnings: Where Street Estimates Are Too Low & Who Should Beat
Share
Subscribe To Alerts
Next Gen Econ Next Gen Econ
Font ResizerAa
  • Personal Finance
  • Credit Cards
  • Loans
  • Investing
  • Business
  • Debt
  • Homes
Search
  • Home
  • News
  • Personal Finance
    • Credit Cards
    • Loans
    • Banking
    • Retirement
    • Taxes
  • Debt
  • Homes
  • Business
  • More
    • Investing
    • Newsletter
Follow US
Copyright © 2014-2023 Ruby Theme Ltd. All Rights Reserved.
Next Gen Econ > Investing > 2Q24 Earnings: Where Street Estimates Are Too Low & Who Should Beat
Investing

2Q24 Earnings: Where Street Estimates Are Too Low & Who Should Beat

NGEC By NGEC Last updated: July 15, 2024 3 Min Read
SHARE

While Street Earnings overstate profits for the majority of S&P 500 companies there are many S&P 500 companies whose Street Earnings are lower than their Core Earnings. Street Earnings refer to Zacks Earnings, which are adjusted to remove non-recurring items using standardized sell-side assumptions.

This report shows:

  • the frequency and magnitude of understated Street Earnings in the S&P 500,
  • five S&P 500 companies likely to beat 2Q24 earnings.

Street EPS Are Lower Than Core EPS for 122 S&P 500 Companies

For 122 companies in the S&P 500, or 24%, Street Earnings are lower than Core Earnings in the trailing-twelve-months (TTM) ended 1Q24. In the TTM ended 4Q23, Street Earnings were understated for 125 companies.

The percentage of the S&P 500 where Street Earnings understate Core Earnings by more than 10% equals 8% (41 companies) in 1Q24, which is down from 43 companies in the TTM ended 4Q23.

Those 41 companies make up 6% of the market cap of the S&P 500 as of 7/8/24, same as what I saw for 4Q23, measured with TTM data in each quarter. See Figure 1.

Figure 1: Understated Street Earnings by >10% as % of Market Cap: 2012 through 7/8/24

The 122 companies with understated (by any amount) Street Earnings represent 30.2% of the market cap of the S&P 500 as of 7/8/24, which is up from 29.8% in the TTM ended 4Q23. See Figure 2.

Figure 2: Understated Street Earnings as % of Market Cap: 2012 through 7/8/24

Note that this analysis is based on my team analyzing the financial statements and footnotes for ~3,000 10-Ks and 10-Qs filed with the SEC for 1Q24 results.

When Street Earnings are lower than Core Earnings, they are understated by an average of 16%, per Figure 3.

Figure 3: Street Earnings Understated by 16% on Average in TTM Through 1Q24

Five S&P 500 Companies Likely to Beat Calendar 2Q24 Earnings

Figure 4 shows five S&P 500 companies likely to beat calendar 2Q24 earnings because their Street EPS estimates are understated. Because investors and analysts tend to anchor their earnings projections to historical results, errors in historical Street EPS lead to errors in Street EPS estimates.

Figure 4: Five S&P 500 Companies Likely to Beat 2Q24 EPS Estimates

*Assumes Street Distortion as a percentage of Core EPS is the same in 4Q23 as the TTM ended 1Q24

Disclosure: David Trainer, Kyle Guske II, and Hakan Salt receive no compensation to write about any specific stock, style, or theme.

Read the full article here

Sign Up For Daily Newsletter

Be keep up! Get the latest breaking news delivered straight to your inbox.

By signing up, you agree to our Terms of Use and acknowledge the data practices in our Privacy Policy. You may unsubscribe at any time.
Share This Article
Facebook Twitter Copy Link Print
What do you think?
Love0
Sad0
Happy0
Sleepy0
Angry0
Dead0
Wink0
Previous Article Understanding futures vs. options: Which is better for you?
Next Article MoneyPass ATMs near me: How to find one
Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

FacebookLike
TwitterFollow
PinterestPin
InstagramFollow
TiktokFollow
Google NewsFollow
Most Popular
What Happens If You Use Retirement Funds to Pay Off Credit Cards
July 1, 2025
How New Graduates Can Survive The Financial Stress Of Today’s Job Hunt
July 1, 2025
Home Upgrades That Secretly Lower Property Value
July 1, 2025
I asked 4 licensed agents what you should know before you shop for car insurance
July 1, 2025
8 Elder Care Scams Still Tricking Thousands Each Year
July 1, 2025
You Bailed During The Stock Market Dip: 5 Moves To Make Now
July 1, 2025

You Might Also Like

Investing

5 Of The World’s Richest Crypto Billionaires

7 Min Read
Investing

Money Market Funds: How To Invest In This Highly Liquid, Low-Risk Asset

8 Min Read
Investing

ETFs Vs. Index Funds: Key Differences And Similarities

10 Min Read
Investing

How To Invest Money Today

12 Min Read

Always Stay Up to Date

Subscribe to our newsletter to get our newest articles instantly!

Next Gen Econ

Next Gen Econ is your one-stop website for the latest finance news, updates and tips, follow us for more daily updates.

Latest News

  • Small Business
  • Debt
  • Investments
  • Personal Finance

Resouce

  • Privacy Policy
  • Terms of use
  • Newsletter
  • Contact

Daily Newsletter

Subscribe to our newsletter to get our newest articles instantly!
Get Daily Updates
Welcome Back!

Sign in to your account

Lost your password?