Wall Street Finally Wakes Up To Awful 2009 Earnings

Finally, another Wall Street firm has realised that next year’s corporate earnings will be lousy. Goldman Sachs is now projecting that earnings for the S&P 500 will drop to $53, down from a peak of $88 in 2006, $83 in 2007, and $55 in 2008.

David Rosenberg at Merrill Lynch has long projected that S&P 500 earnings next year might be around $50, but he’s been a voice in the wilderness. Now he has a pal.

Unfortunately, the rest of Wall Street is still living in dreamland.  The consensus S&P 500 earnings estimate for next year is $83.  This estimate has been cut about 25% from the peak number, which is a step in the right direction (four months ago, analysts thought Q4 earnings would be the highest ever). 

Still, the estimate needs to be cut by at least another 25%.  So that means Wall Street will be cutting estimates for a while yet.

(The good news: Goldman says that–contrary to common wisdom–the market often rallies in the face of this.  So we’ve got that going for us.)

 

See Also: Analysts In Imaginationland: Q4 Earnings To Be Highest Ever!

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