If you think we are going into a recession, that estimate of 15% earnings growth is clearly wrong.
During the last recession, in 2020, earnings growth dropped 13% year-over-year, though they recovered quickly in 2021.
Another issue is the forward earnings multiple, or P/E ratio, which is a measure of how much investors are paying for $1 of future earnings.
First, a garden variety correction (down 10%), would bring the S & P 500 to about 5,100, about 200 points below where it is now.
): Current situation: 15% earnings growth, 19.1 P/E = S & P 5,300 Lower growth, same P/E 10% earnings growth, 19 P/E = S & P 5,089 Lower growth, lower P/E: 10% earnings growth 17 P/E = S & P 4,554 Bearish: 5% earnings growth 15 P/E = S & P 3,835 Recession, really?
Persons:
let's, Cameron Dawson, Keith Lerner, it's
Organizations:
Nikkei, NewEdge Wealth, Truist
Locations:
recessionary