5-6 weeks into the Iran battle, essentially the most shocking side of the earnings knowledge is that the sell-side continues to be revising ahead S&P 500 EPS estimates increased, for the benchmark, not essentially for all of the parts.
- The “ahead 4-quarter estimate” ended this week at $319.98, versus final week’s $316.89 for a sequential enhance of 1%;
- The PE ratio on the ahead estimate is now simply 20.3x versus final week’s 21.1x.
- The S&P 500 earnings yield jumped to 4.92% this week, the best print since final April 4th, ’25’s 5.50% on the Liberation Day lows;
- Excessive yield spreads (per Bespoke knowledge) widened this previous week to +320 versus the +394 in early April of ’25, once more versus the Liberation day wides.
To provide readers a perspective on the FFQE versus its a number of over the past 4 – 5 weeks, right here’s the FFQE together with its rapidly-shrinking a number of:
- 3/20/26: $319.98, PE is 20.23x.
- 3/13/26: $316.89, PE was 21.1x.
- 3/6/26: $315.89, PE was 21.3x
- 2/28/26: $314.77, PE was 21.85x
- 2/20/26: $313.93, PE was 22.01x
How Are 2026 and 2027 S&P 500 EPS Estimates Holding Up?
(Information sourced from LSEG, click on on the spreadsheet to enlarge)
There are a few alternative ways this weblog slices and dices earnings knowledge from LSEG: one is to trace the annual EPS estimates revealed every week and notice the “charge of change” for every interval on the spreadsheet.
Observe how the 26 and 52 week charge of change for the 2026 S&P 500 EPS estimates has truly accelerated the final 4 weeks (i.e., for the reason that begin of the Iran battle).
That’s not one thing I anticipated to see given the course of inventory costs.
Sector EPS Development Estimate Adjustments for ’26: Expertise is Large Revision Winner
This anticipated S&P 500 sector EPS progress estimates for 2026 exhibits that expertise estimates have been revised S-H-A-R-P-L-Y increased since mid-February ’26, and my educated guess is an enormous chunk of that is Oracle (NYSE:) and Micron Expertise (NASDAQ:), which reported final week.
Right here is one thing outstanding: check out these LSEG consensus estimates for Micron Expertise from fiscal ’24 (fy ends August) to fiscal ’27: (as of three/20/26)
- FY ’28: $79.54 (present PE is 5x)
- FY ’27: $92.35 (present PE is 4.5x)
- FY ’26: $54.30 (present PE is 7.8x)
- FY ’25: $8.02
- FY ’24: $1.21
- PE primarily based on closing value of $422.90 on 3/20/26)
To me, that’s fairly astounding. The expansion in these MU EPS estimates is essentially from reminiscence progress getting used within the Nvidia chips.
What’s attention-grabbing concerning the vitality sector estimates, trying on the above desk, is that vitality numbers have simply began to get a lift within the final two weeks. The vitality sector, which has shrunk to three.8% of the S&P 500’s market cap versus the 14% – 15% that was its earlier weight as late September 2014.
In response to TJ Dhillon, my earnings contact at LSEG, the earnings weight of semiconductors and semiconductor capital gear was 38% of the expertise sector in late January ’26. That proportion may very well be increased now, given the expansion in Micron’s estimates.
Conclusion
The S&P 500 PE a number of is quickly contracting as EPS estimates are quickly rising for the benchmark, primarily due to expertise {hardware} EPS progress. Is the SAAS-pocalypse over for now? Oracle’s outcomes and steering may need put to mattress the troubles over the AI displacement of the standard software program distributors, however this weblog is just not an knowledgeable on the software program software area.
Finally, this weblog follows S&P 500 earnings and income revisions.
The primary quarter of 2026 ends in about 10 days, and earnings will begin one other 10 days after that.
The S&P 500 is down 5% YTD, which – given the headlines – you’d have probably anticipated a far worse YTD return.
The S&P 500 EPS revisions are undoubtedly conflicting with S&P 500 value motion, which is what makes traders and markets.
By all conventional measures, the S&P 500 has reached or is getting near “oversold” standing, however we aren’t seeing the “worry” gauges just like the VIX hit the acute close to 60, which was it’s April ’25 excessive round Liberation Day.
Disclaimer: None of that is recommendation or a advice, however solely an opinion. Previous efficiency is not any assure of future outcomes. All S&P 500 EPS and income knowledge is sourced from LSEG.com. That is the primary respectable market correction since April of ’25. Readers and shoppers ought to gauge their very own consolation with portfolio volatility and modify accordingly.
Thanks for studying.
