S&P Industry Briefing: S&P Excluding Energy October, 18 Dr. Ed Yardeni 16-97-7683 eyardeni@ Joe Abbott 73-97-36 jabbott@ Please visit our sites at www. blog. thinking outside the box
Table Of Contents Table Of Contents S&P ex-energy Actual Revenues & Earnings 1- S&P ex-energy Forward Revenues & Earnings 3- S&P ex-energy Blue Angels 6 S&P ex-energy Forward Earnings & Revenues 7 S&P ex-energy Forward Margin & Valuation 8 S&P ex-energy NERI & STEG 9 S&P ex-energy Forward Earnings & Revenues 1 S&P ex-energy Earnings & Revenue Growth 11 S&P ex-energy Operating Profit Margin 1 S&P ex-energy Margin & Valuation 13 S&P 6 ex-energy Margin & Valuation 1 October, 18 / S&P Excluding Energy www.
S&P ex-energy Actual Revenues & Earnings Figure 1. S&P AGGREGATE REVENUES (S&P data, not per share) (yearly percent change) 1 1 1 Q 1 - -1-1 S&P Aggregate Revenues Total (9.1) Ex-Energy (7.1) - -1-1 - 3 6 7 8 9 1 11 1 13 1 1 16 17 18 19 Source: Standard & Poor s. - 6 3 1-1 - -3 - - -6 Figure. S&P AGGREGATE OPERATING EARNINGS (S&P data, not per share) (yearly percent change) S&P Aggregate Earnings Total (.3) Ex-Energy (.) Y/Y percent growth capped at % and -% due to extreme values. 3 6 7 8 9 1 11 1 13 1 1 16 17 18 19 Source: Standard & Poor s. Q 6 3 1-1 - -3 - - -6 Page 1 / October, 18 / S&P Excluding Energy www.
7 S&P ex-energy Actual Revenues & Earnings Figure 3. S&P AGGREGATE REVENUES (S&P data, not per share) (billion dollars) Q 7 17 1 S&P Aggregate Revenues Total (81.) Ex-Energy (39.6) 17 1 1 1 3 6 7 8 9 1 11 1 13 1 1 16 17 18 19 Source: Standard & Poor s. 1 3 3 Figure. S&P AGGREGATE OPERATING EARNINGS (S&P data, not per share) (billion dollars) Q 3 3 3 3 7 7 17 17 1 1 1 1 1 S&P Aggregate Earnings 1 7 Total (37.) 7 Ex-Energy (31.) - 3 6 7 8 9 1 11 1 13 1 1 16 17 18 19 Source: Standard & Poor s Corporation. - Page / October, 18 / S&P Excluding Energy www.
13 1 S&P ex-energy Forward Revenues & Earnings Figure. S&P AGGREGATE FORWARD EARNINGS & REVENUES* (Thomson Reuters data) (billion dollars) 16 1 11 1 1 9 S&P Aggregate Forward Earnings (1.) 1 8 S&P Aggregate Forward Revenues (1179.) 8 7 6 6 6 7 8 9 1 11 1 13 1 1 16 17 18 19 * Time-weighted average of the consensus estimates for current and next year. 11 Figure 6. S&P AGGREGATE FORWARD EARNINGS & REVENUES EXCLUDING ENERGY* (Thomson Reuters data) (billion dollars) 1 1 1 9 1 8 S&P Aggregate Forward Earnings ex-energy (139.9) 8 7 S&P Aggregate Forward Revenues ex-energy (163.1) 6 6 6 7 8 9 1 11 1 13 1 1 16 17 18 19 * Time-weighted average of the consensus estimates for current and next year. Page 3 / October, 18 / S&P Excluding Energy www.
1 11 S&P ex-energy Forward Revenues & Earnings Figure 7. S&P AGGREGATE FORWARD REVENUES* (ratio scale, billion dollars) 1 11 1 1 9 9 8 8 7 S&P (1179.) S&P ex-energy (163.1) 7 6 6 7 8 9 1 11 1 13 1 1 16 17 18 19 6 * Time-weighted average of the consensus estimates for current and next year. 3 Figure 8. AGGREGATE FORWARD REVENUES* (yearly percent change) 3 1 S&P (8.6) S&P ex-energy (7.1) 1 1 1 - - -1-1 -1-6 7 8 9 1 11 1 13 1 1 16 17 18 19-1 - * Time-weighted average of the consensus estimates for current and next year. Page / October, 18 / S&P Excluding Energy www.
16 1 1 S&P ex-energy Forward Revenues & Earnings Figure 9. S&P AGGREGATE FORWARD EARNINGS* (ratio scale, billion dollars) 16 1 1 1 1 8 8 6 6 S&P (1.) S&P ex-energy (139.9) 9 96 97 98 99 1 3 6 7 8 9 1 11 1 13 1 1 16 17 18 19 * Time-weighted average of the consensus estimates for current and next year. Monthly through December, weekly thereafter. 6 Figure 1. AGGREGATE FORWARD EARNINGS* (yearly percent change) S&P (.8) S&P ex-energy (17.8) 6 3 3 1 Jan 1-1 -1 - - -3-9 96 97 98 99 1 3 6 7 8 9 1 11 1 13 1 1 16 17 18 19-3 - * Time-weighted average of the consensus estimates for current and next year. Monthly through December, weekly thereafter. Page / October, 18 / S&P Excluding Energy www.
S&P ex-energy Blue Angels 38 31 Figure 11. S&P INDEX, FORWARD EARNINGS, & VALUATION S&P Index 1/3/18 Blue Angels Implied Price Index* /18 x x x1 38 31 17 x1 17 1 1 3 9 96 97 98 99 1 3 6 7 8 9 1 11 1 13 1 1 16 17 18 19 3 * Implied price index calculated using forward earnings times forward P/Es. Source: Standard & Poor s Corporation and Thomson Reuters I/B/E/S. 7 17 Figure 1. S&P INDEX EX-ENERGY, FORWARD EARNINGS, & VALUATION S&P Index ex-energy /18 Blue Angels Implied Market Cap Index (billion $)* /18 x18 x16 x1 x1 7 17 1 x1 1 7 7 9 96 97 98 99 1 3 6 7 8 9 1 11 1 13 1 1 16 17 18 19 * Implied price index calculated using forward earnings times forward P/Es. Source: Standard & Poor s Corporation and Thomson Reuters I/B/E/S. Page 6 / October, 18 / S&P Excluding Energy www.
S&P ex-energy Forward Earnings & Revenues 16 1 1 1 Figure 13. AGGREGATE FORWARD EARNINGS* (ratio scale, billion dollars) 16 1 1 1 8 8 6 6 S&P (1.) Energy (9.1) S&P ex-energy (139.9) 9 96 97 98 99 1 3 6 7 8 9 1 11 1 13 1 1 16 17 18 19 * Time-weighted average of the consensus estimates for current and next year. Monthly through December, weekly thereafter. 16 16 16 Figure 1. AGGREGATE FORWARD REVENUES* (ratio scale, billion dollars) 16 16 16 86 86 66 66 6 S&P (1179.) Energy (1191.9) S&P ex-energy (163.1) 6 6 6 6 6 7 8 9 1 11 1 13 1 1 16 17 18 19 6 * Time-weighted average of the consensus estimates for current and next year. Page 7 / October, 18 / S&P Excluding Energy www.
1 1 S&P ex-energy Forward Margin & Valuation Figure 1. FORWARD PROFIT MARGIN* (percent) S&P (1.3) S&P Energy (7.6) S&P ex-energy (1.8) 1 1 1 1 8 8 6 6 6 7 8 9 1 11 1 13 1 1 16 17 18 19 * Using consensus forward revenues and earnings forecasts. Monthly through December, weekly thereafter. 6 6 3 3 1 1 1..7... -. -. -.7-1. -1. -1. Figure 16. FORWARD P/E RATIO* S&P (16.9) S&P Energy (16.) S&P ex-energy (16.9) P/E Difference Attributable To Energy (.) 9 96 97 98 99 1 3 6 7 8 9 1 11 1 13 1 1 16 17 18 19 6 6 3 3 1 1 1..7... -. -. -.7-1. -1. -1. * Price divided by consensus forward earnings forecast. Monthly through December, weekly thereafter. Page 8 / October, 18 / S&P Excluding Energy www.
6 - - -6 Figure 17. S&P ex-energy NERI & STEG NET REVISIONS* (% estimates up less down) S&P (6.7) S&P Energy (.) S&P ex-energy (7.1) Sep 6 - - -6 - Sep - - -6 S&P NERI Points Attributable To Energy (-.3) 9 96 97 98 99 1 3 6 7 8 9 1 11 1 13 1 1 16 17 18 19 - -6 * Three-month moving average of the number of estimates up less number of estimates down, expressed as a percentage of the total number of estimates. 8 7 6 3 Figure 18. FORWARD EARNINGS GROWTH* (percent) Energy STEG capped at 6% due to extreme values. S&P (1.) Energy (36.1) S&P ex-energy (11.) 8 7 6 3 1-1 - -3 - - 9 96 97 98 99 1 3 6 7 8 9 1 11 1 13 1 1 16 17 18 19 1-1 - -3 - - * Time-weighted average of the consensus estimates for current and next year. Monthly through December, weekly thereafter. Page 9 / October, 18 / S&P Excluding Energy www.
1 1 7 S&P ex-energy Forward Earnings & Revenues Figure 19. FORWARD EARNINGS* (yearly percent change) S&P (.7) Energy (9.) S&P ex-energy (17.8) 1 1 7 - - - - -7 9 96 97 98 99 1 3 6 7 8 9 1 11 1 13 1 1 16 17 18 19-7 * Time-weighted average of the consensus estimates for current and next year. Monthly through December, weekly thereafter. 1 8 6 Figure. FORWARD REVENUES* (yearly percent change) S&P (1.) Energy (.) S&P ex-energy (7.1) 1 8 6 - - - - -6 6 7 8 9 1 11 1 13 1 1 16 17 18 19-6 * Time-weighted average of the consensus estimates for current and next year. Monthly through December, weekly thereafter. Page 1 / October, 18 / S&P Excluding Energy www.
1 S&P ex-energy Earnings & Revenue Growth Figure 1. S&P EX-ENERGY REVENUE GROWTH (S&P data) (yearly percent change) 1 1 1 Q - - -1-1 -1 1 3 6 7 8 9 1 11 1 13 1 1 16 17 18 19 Source: Standard & Poor s Corporation. -1 1 1 8 6 - - -6-8 -1-1 Figure. S&P EX-ENERGY EARNINGS GROWTH (S&P data)* (yearly percent change) 1 3 6 7 8 9 1 11 1 13 1 1 16 17 18 19 Q 1 1 8 6 - - -6-8 -1-1 * Yearly growth rates capped at +1% and -1% due to extreme values. Source: Standard & Poor s Corporation. Page 11 / October, 18 / S&P Excluding Energy www.
1 1 1 8 6 - - -6-8 -1-1 Figure 3. S&P ex-energy Operating Profit Margin PROFIT MARGIN (percent, quarterly) S&P (11.6) S&P Energy (6.3) S&P ex-energy (1.) 3 6 7 8 9 1 11 1 13 1 1 16 17 18 19 Source: Standard & Poor s Corporation. Q 1 1 1 8 6 - - -6-8 -1-1 1 1 1 Figure. PROFIT MARGIN (percent, trailing -quarter) Q 1 1 1 8 8 6 6 - - -6 S&P (1.9) S&P Energy (.) S&P ex-energy (11.) - - -6-8 3 6 7 8 9 1 11 1 13 1 1 16 17 18 19 Source: Standard & Poor s Corporation. -8 Page 1 / October, 18 / S&P Excluding Energy www.
18 16 1 1 1 8 6 - Figure. S&P ex-energy Margin & Valuation FORWARD PROFIT MARGIN* (percent) S&P (7.6) S&P Energy (.6) S&P ex-energy (8.) 6 7 8 9 1 11 1 13 1 1 16 17 18 19 18 16 1 1 1 8 6 - * Using consensus forward revenues and earnings forecasts. Monthly through December, weekly thereafter. 3 3 1 1 1. 1..7... -. -. -.7-1. Figure 6. FORWARD P/E RATIO* S&P (17.1) S&P Energy (8.) S&P ex-energy (16.7) P/E capped at due to extreme values. P/E Difference Attributable To Energy (.) 6 7 8 9 1 11 1 13 1 1 16 17 18 19 3 3 1 1 1. 1..7... -. -. -.7-1. * Price divided by consensus forward earnings forecast. Monthly through December, weekly thereafter. Page 13 / October, 18 / S&P Excluding Energy www.
1 Figure 7. S&P 6 ex-energy Margin & Valuation FORWARD PROFIT MARGIN* (percent) S&P 6 (.6) S&P 6 Energy (6.) S&P 6 ex-energy (.6) 1 1 1-6 7 8 9 1 11 1 13 1 1 16 17 18 19 - * Using consensus forward revenues and earnings forecasts. Monthly through December, weekly thereafter. 3 3 Figure 8. FORWARD P/E RATIO* S&P 6 (18.3) S&P 6 Energy (1.7) S&P 6 ex-energy (18.) 3 3 1 1 1 1 1. 1. P/E Difference Attributable To Energy (-.) 1. 1..... -. -. -1. 6 7 8 9 1 11 1 13 1 1 16 17 18 19-1. * Price divided by consensus forward earnings forecast. Monthly through December, weekly thereafter. Page 1 / October, 18 / S&P Excluding Energy www.
Copyright (c) 18. All rights reserved. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, or correctness of the information and opinions contained herein. The views and the other information provided are subject to change without notice. All reports posted on www., blog., http://blog. and YRI s Apps for ipads and iphones are issued without regard to the specific investment objectives, financial situation, or particular needs of any specific recipient and are not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Past performance is not necessarily a guide to future results. Company fundamentals and earnings may be mentioned occasionally, but should not be construed as a recommendation to buy, sell, or hold the company s stock. Predictions, forecasts, and estimates for any and all markets should not be construed as recommendations to buy, sell, or hold any security--including mutual funds, futures contracts, and exchange traded funds, or any similar instruments. The text, images, and other materials contained or displayed on any product, service, report, email or website are proprietary to and constitute valuable intellectual property. No material from any part of www., blog., http://blog. and YRI s Apps for ipads and iphones may be downloaded, transmitted, broadcast, transferred, assigned, reproduced or in any other way used or otherwise disseminated in any form to any person or entity, without the explicit written consent of All unauthorized reproduction or other use of material from Yardeni Research, Inc. shall be deemed willful infringement(s) of this copyright and other proprietary and intellectual property rights, including but not limited to, rights of privacy. Yardeni Research, Inc. expressly reserves all rights in connection with its intellectual property, including without limitation the right to block the transfer of its products and services and/or to track usage thereof, through electronic tracking technology, and all other lawful means, now known or hereafter devised. reserves the right, without further notice, to pursue to the fullest extent allowed by the law any and all criminal and civil remedies for the violation of its rights. The recipient should check any email and any attachments for the presence of viruses. accepts no liability for any damage caused by any virus transmitted by this company s emails, website, blog and Apps. Additional information available on request. requests@