Analysts' outlook of another quarterly profit drop is bad for stocks. But they're routinely wrong
For the first time in a year, the big companies in the S&P 500 may be seeing their profits grow again
NEW YORK (AP) — For the first time in a year, the big companies in the S&P 500 may be seeing their profits grow again.
The latest earnings reporting season is getting underway, and the broad expectation is for companies in the S&P 500 to say their earnings per share slipped 0.3% during the summer from a year earlier. That would mark a fourth straight quarter of profit declines, according to FactSet, but analysts' forecasts are routinely wrong.
If this earnings season’s results follow that trend, a return to growth would offer support for a stock market that needs it.
Two main factors dictate where a stock price goes: how much profit a company generates and how much investors are willing to pay for each $1 of that. The second one has taken a hit as bond yields have soared.
