The Q2 earnings season has not only surpassed Wall Street’s expectations but has also outpaced the long-term historical average, indicating a robust quarter for American companies.
The latest data unveiled by FactSet Research Systems Inc.FDS, a financial data and software company based in Norwalk, Connecticut, reveals that an impressive 79% of S&P 500 companies reported actual EPS above the Street’s mean forecast, surpassing both the 5-year and 10-year averages of 77% and 73%, respectively.
Equally encouraging is the magnitude of the earnings beats. Overall, earnings have exceeded estimates by 7.2%, slightly lower than the 5-year average of 8.4%, but higher than the 10-year average of 6.4%.
However, despite these positive earnings surprises, the reaction in the stock prices of these companies has been quite unexpected.
Interesting article and FactSet suggests the high PE ratio along with the over valuation of stocks is the driving force for this response to the positive earnings we are seeing…doc