Wall Street’s expectations for 2023 have dropped as forecasts for the new year come out, and the news could turn worse when they take into account disappointing results from Big Tech. But at least Bob Iger will be back for the sequel.
Google, Facebook, Amazon and Apple are all disappointed with this week’s holiday earnings. Their forecasts range from non-existent to partial to meh, and the fallout will only add to the biggest drop in Wall Street expectations throughout the year since 2016.
Average analyst forecast for 2023 earnings from the S&P 500
SPX
According to John Butters, senior earnings analyst at FactSet, the drop was 2.5% in January, the worst rate in seven years. Those predictions started going lower last yearand the decline is only getting stronger — analysts are now predicting 3% earnings growth in 2023, and that depends on a major holiday rebound from results released this quarter.
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The news was even worse in the first quarter, whereby predictions fell 3.3% in January as companies sniffed their forecasts at breakneck speed: 86% of 43 companies guidance on first-quarter earnings missed forecasts, Butters reported. Earnings are now expected to drop 4.2%, which would be the first annual drop in earnings since Q3 2020, when the COVID-19 pandemic debt forgiveness started rolling in.
Big Tech has only added to its downward trajectory in recent days. Amazon.com Inc.
AMZN
missed the holiday earnings as well as the forecast for the first quarterand that company can determine for themselves whether S&P 500 returns will increase in 2023. Amazon’s worst holiday earnings since 2014 may also have contributed to the first drop in consumer discretionary income since the start of the pandemic, with holiday earnings now is expected to fall more than 5%.
Google’s parent company, Alphabet Inc.
GOOGLE
GOOG
And The parent company of Facebook Meta Platforms Inc.
META
also missed their respective earnings targets amid problems with the digital advertising industry, leading to the media services industry having its worst earnings season in the S&P 500. has so far fallen 25.2%, the worst of the 11 S&P 500 Butters reported, but would have fallen only 6.5% without the impact of Meta and Alphabet.
Apple Inc.
AAPL
nor do predict any favors, reports biggest revenue drop since 2016 and missed earnings Thursday afternoon. In a partial forecast, Executives predicted a similar drop in sales in the first quarter, though unofficially.
Earnings this week
Afterward busiest week in earnings season In the end, don’t expect much relief — 95 S&P 500 companies are expected to report next week, the third consecutive week that at least 90 companies have reported. There will be many conspiracies among non-S&P 500 companies, including Robinhood Markets Inc.
HOOD
and Affirm Holdings Inc.
AFRM
report together on Wednesday afternoon.
There is only one Dow Jones Industrial Average
DJIA
Stocks will report, but it’s the Wednesday call you’ll want to watch: Bob Iger returns to Walt Disney Co.
dis
display income.
Calls to include in your calendar
- Disney: The Last time Disney released earnings, Bob Chapek’s performance was terrible that Disney Board Brings Iger Back to redirect the company. While he had to battle activist investor Nelson Peltz— there was duel letter this week as Peltz seeks a seat on the Disney board — this will be Iger’s real return to the Wall Street scene. The longtime CEO has always had a knack for attracting investors, often appearing live on CNBC between bells and conference calls on earnings day, sometimes giving out confidential tidbits to fans. grave all afternoon. Listen to him on Wednesday to see what he expects to change after replacing Chapek. For more: Wall Street shows love to Bob Iger, ‘probably the best leader in the media’
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Take two: Any hints as to when we’ll see “Grand Theft Auto VI?” Analysts are trying to time the game’s release, as it has the potential to lead to a huge amount of profit that could… go ahead, if “GTA V” — remains one of the best-selling games. every year and biggest ever – is any sign. Interactive Software Take-Two Inc.
TTWOreported Monday, after its shares fell more than 40% in 2022 amid a merger with Zynga. Results will likely be based on “NBA 2K23” holiday sales, but analysts will want news on the system. The same afternoon, video game publisher Activision Blizzard Inc.
ATVIwill announce earnings, but again won’t hold a conference call because it’s awaiting acquisition by Microsoft. Read: As gamers wait for ‘Grand Theft Auto VI,’ Take-Two could have ‘important announcements just around the corner,’ analyst says
Numbers to see
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Food prices: Groceries, prepared foods and even snacks have seen higher prices during bouts of inflation, and executives will give clues about their pricing plans almost every day of the week: Tyson Foods Inc.
TSNon Monday, Chipotle Mexican Grill Inc.
CMGon Tuesday, Yum Brands Inc.
YUMon Wednesday and ending with PepsiCo Inc.
PEP,Kellogg Co
KYand Flowers Foods Inc.
FLOon Thursday. Listen to some of the phrases they use to suggest that they can still bullish if they want last season: “pricing power”, “strong pricing” or “price realization”.
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Car rental price and demand: In their most recent results, Lyft Inc.
LYFTdisappointed with the number of rides, but showed much higher revenue per ride, while Uber Technologies Inc.
UBERtrips increased 19% as total bookings increased 45% on a constant currency basis. Both of these point to rising prices, which could affect demand, which is steadily increasing in the third year of the COVID-19 pandemic. Compare bookings and revenue growth with ridership and ride growth as Uber reports Wednesday morning and Lyft Thursday afternoon. Read more: Food prices continue to rise. Food company executives are betting that Americans will keep paying.
