Some market cheerleaders are pointing to price-to-earnings multiples as an indicator that stocks are cheap. At the very least they should mention that earnings expectations are still higher than the reality will deliver. If you look at the guidance given in many of the earnings reports we've seen this season, especially in the tech sector, forward multiples are not low enough to overcome investor skepticism. That means we have not seen the final lows of this bear market.It's about time these high-buck analysts did their jobs. From Bloomberg:
The trick, of course, is to anticipate the inflection point. Right now, I don't see it. But what do I know, I'd have bet on the Germans in 1940 (based on a tip from Joe Kennedy).
Analysts are slicing profit forecasts for U.S. companies in the fourth quarter and 2009 as third- period results miss projections at the highest rate in almost 11 years.``Estimates have been coming down with a vengeance,'' said Dirk van Dijk, director of research at Zacks Investment Research Inc. in Chicago. ``It's just plain ugly out there.''
Companies in the Standard & Poor's 500 Index may see fourth-quarter earnings advance 15 percent, down from 42 percent projected at the end of August, according to a Bloomberg survey of analysts' estimates. Profits in 2009 may grow 13 percent, analysts say now, compared with the 24 percent predicted two months ago....MORE
HT: naked capitalism who adds
"Um, I am missing something. Analysts are still calling for earnings growth?
Ooh, wait for further revisions..."
