Firms’ Inflation Expectations And Factors In Pricing Decisions

The Federal Reserve Bank of Atlanta publishes a monthly report titled “Business Inflation Expectations” (BIE) that contains statistics from a survey of regional businesses’ views on various factors that impact profitability.  These factors include unit costs, unit cost expectations, sales levels, pricing, profit margins, and other factors.

As described on the site:

“Approximately 300 panelists receive the survey each month. Panelists represent businesses of various sizes headquartered within the Sixth District, which encompasses Alabama, Florida, Georgia, and sections of Louisiana, Mississippi, and Tennessee. Panelists range from executives of large corporations to owner-operators of small businesses. The industry composition of the panel roughly reflects the makeup of the national economy. Nevertheless, survey responses are weighted by industry shares of national gross domestic product.”

An excerpt from the February 2024 BIE Survey dated February 21, 2024 (involving 295 firms responding):

  • Inflation expectations: Firms’ year-ahead inflation expectations remained relatively unchanged at 2.3 percent, on average.
  • Current economic environment: Sales levels and profit margins “compared to normal” increased over the month. Year-over-year unit cost growth remained relatively unchanged at 2.6 percent, on average.
  • Quarterly question: Over the past 12 months, firms saw prices rise by an average of 6.0 percent, but they project a more moderate increase of approximately 3.8 percent in the next 12 months.
  • Special question: Firms were asked about the factors they follow when setting prices. They were also asked about the impact of the Consumer Price Index on their business decisions. A breakdown of the results can be found in the special question section below.

The report also includes other questions and a variety of charts and tables depicting respondents’ answers.

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RevSD, LLC offers the above commentary for informational purposes only, and does not necessarily agree with all (or any) of the views expressed by these outside parties.

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ProfitabilityIssues.com is published by RevSD, LLC.  RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future business conditions, and given these conditions, offers corporations and businesses advice, strategies, and actionable methods on how to optimally increase revenues and profitability.

S&P500 Earnings Trends – February 2024

S&P500 earnings trends and estimates are a notably important topic, for a variety of reasons, at this point in time.

FactSet publishes a report titled “Earnings Insight” that contains a variety of information including the trends and expectations of S&P500 earnings.

For reference purposes, here are two charts as seen in the “Earnings Insight” report of February 9, 2024:

from page 32:

(click on charts to enlarge images)

S&P500 EPS forecasts

from page 33:

S&P500 EPS 2014-2025

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RevSD, LLC offers the above commentary for informational purposes only, and does not necessarily agree with all (or any) of the views expressed by these outside parties.

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ProfitabilityIssues.com is published by RevSD, LLC.  RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future business conditions, and given these conditions, offers corporations and businesses advice, strategies, and actionable methods on how to optimally increase revenues and profitability.

S&P500 EPS Estimates For 2023 – 2025 As Of February 9, 2024

As many are aware, Refinitiv publishes earnings estimates for the S&P500.

The following estimates are from Exhibit 24 of the “S&P500 Earnings Scorecard” (pdf) of February 9, 2024, and represent an aggregation of individual S&P500 component “bottom up” analyst forecasts.  For reference, the Year 2014 value is $118.78/share; the Year 2015 value is $117.46/share; the Year 2016 value is $118.10/share; the Year 2017 value is $132.00/share; the Year 2018 value is $161.93/share; the Year 2019 value is $162.93/share; the Year 2020 value is $139.72/share; the year 2021 value is $208.12/share; and the year 2022 value is $218.09/share:

Year 2023 estimate:

$224.55/share

Year 2024 estimate:

$243.12/share

Year 2025 estimate:

$274.92/share

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RevSD, LLC offers the above commentary for informational purposes only, and does not necessarily agree with all (or any) of the views expressed by these outside parties.

—–

ProfitabilityIssues.com is published by RevSD, LLC.  RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future business conditions, and given these conditions, offers corporations and businesses advice, strategies, and actionable methods on how to optimally increase revenues and profitability

S&P500 EPS Forecasts From Standard & Poor’s February 7, 2024

As many are aware, Standard & Poor’s publishes earnings estimates for the S&P500.  

For reference purposes, the most current estimates are reflected below, and are as of February 7, 2024:

Year 2023 estimates add to the following:

-From a “bottom up” perspective, operating earnings of $211.61/share

-From a “bottom up” perspective, “as reported” earnings of $190.65/share

Year 2024 estimates add to the following:

-From a “bottom up” perspective, operating earnings of $240.40/share

-From a “bottom up” perspective, “as reported” earnings of $217.83/share

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RevSD, LLC offers the above commentary for informational purposes only, and does not necessarily agree with all (or any) of the views expressed by these outside parties.

—–

ProfitabilityIssues.com is published by RevSD, LLC.  RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future business conditions, and given these conditions, offers corporations and businesses advice, strategies, and actionable methods on how to optimally increase revenues and profitability

Firms’ Inflation Expectations And Current Business Results

The Federal Reserve Bank of Atlanta publishes a monthly report titled “Business Inflation Expectations” (BIE) that contains statistics from a survey of regional businesses’ views on various factors that impact profitability.  These factors include unit costs, unit cost expectations, sales levels, pricing, profit margins, and other factors.

As described on the site:

“Approximately 300 panelists receive the survey each month. Panelists represent businesses of various sizes headquartered within the Sixth District, which encompasses Alabama, Florida, Georgia, and sections of Louisiana, Mississippi, and Tennessee. Panelists range from executives of large corporations to owner-operators of small businesses. The industry composition of the panel roughly reflects the makeup of the national economy. Nevertheless, survey responses are weighted by industry shares of national gross domestic product.”

An excerpt from the January 2024 BIE Survey dated January 17, 2024 (involving 270 firms responding):

  • Inflation expectations: Firms’ year-ahead inflation expectations significantly decreased to 2.2 percent, on average.
  • Current economic environment: Sales levels and profit margins “compared to normal” increased. Year-over-year unit cost growth significantly decreased to 2.7 percent, on average.
  • Quarterly question: Firms’ sales levels (compared to “normal” unit sales levels) decreased to 5.3 percent below normal.
  • Special question: Firms were asked about their most pressing concerns looking ahead into 2024. They were also asked about their turnover rate. A breakdown of the results can be found in the special questions section below.

The report also includes other questions and a variety of charts and tables depicting respondents’ answers.

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RevSD, LLC offers the above commentary for informational purposes only, and does not necessarily agree with all (or any) of the views expressed by these outside parties.

—–

ProfitabilityIssues.com is published by RevSD, LLC.  RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future business conditions, and given these conditions, offers corporations and businesses advice, strategies, and actionable methods on how to optimally increase revenues and profitability.