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Are earnings expectations falling apart? No. ๐Ÿค”

www.tker.co

Are earnings expectations falling apart? No. ๐Ÿค”

"The facts do not bear this out" ๐Ÿ“‰

Sam Ro, CFA
Jun 8, 2022
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Are earnings expectations falling apart? No. ๐Ÿค”

www.tker.co
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Negative revisions are not unusual. (Source: Getty)

Microsoft and Target are among prominent companies that have made headlines recently by announcing they are cutting estimates for future earnings. And these anecdotes arenโ€™t totally isolated.

Some prominent Wall Street bears have noted for months that S&P 500 company earnings revisions have appeared to become increasingly negative.

These headlines are understandably alarming, especially since,ย as TKer readers know from our headlines, earnings are the most important long-term driver of stock prices.1

However, thereโ€™s much more to this story.

โ€œThereโ€™s a popular narrative that earnings estimates are beginning to fall apart,โ€ Jonathan Golub, chief U.S. equity strategist at Credit Suisse, wrote on Wednesday. โ€œThe facts do not bear this out.โ€œ

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