Q1: Still Playing Catch-up

Estimated bottom-up operating EPS for the S&P 500 has rocketed 13% higher since the start of Q1 reporting in April. For the past year-and-a-half, upward revisions are a familiar pattern, but nothing of the current magnitude. Expectations for future quarters, usually in a wait-and-see mode, have also been rising. Collectively, these EPS upgrades have dampened a decent chunk of the multiple expansion with the S&P 500’s recent run-up.