On Friday, September 30th, we held our Q4 Outlook call for clients.  This is the third quarter in a row we’ve held an outlook call, which has proven to be a very popular feature among Bespoke clients.  The quarterly outlooks are an outgrowth of Bespoke’s widely read and quoted annual outlook piece, The Bespoke Report, which is released at the end of December each year.  A recording of Friday’s call and the 26-page presentation are available with any paid membership to Bespoke.  Review our subscription options and choose any plan to listen to the call and view the presentation.

One of the most popular elements of the outlook (this quarter and in the past) is our view of analyst sentiment heading into earnings season.  We never mean to kick the analyst community, but historically speaking, sentiment among analysts has been a great contrarian indicator for stock performance.  As has been the case for quite some time, analysts are once again lowering forecasts heading into this earnings season, which officially kicks off on 10/10 with Alcoa (though the bulk of earnings reports won’t come out til later in the month).  As you can see in the preview of the slide below, there are a few notable points about this upcoming earnings season:

  • Technology and Utilities are the only two sectors with a positive “earnings revision spread,” which means the bar may be set too high for those sectors (remember, earnings revision spread is a contrarian indicator in our view).
  • While analysts are negative, management teams are actually much more positive:  “warnings” from companies about results are at relatively low levels for this time of year.
  • In the last 23 quarters in which the revisions spread was negative, the S&P 500 traded higher 18 times.

As mentioned earlier, the outlook presentations (including recording of the calls) are available with ALL of our membership levels.  Review our subscription options and choose any plan to access our Q4 Outlook along with the rest of Bespoke’s daily research.

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