May 4, 2020
Linearity has been the big theme during Q1 earnings calls with glimmers of hope (MA, V and BAC notably) for consumer spending trends stabilizing in April and improving in May. CQ1 earnings season continues this week with DIS being the last ‘major’ report before investors turn their attention to a very busy sell-side conference season. There are 31 scheduled sell-side industry conferences between now and mid-June. Management commentary at these conferences will be closely followed with possible implications for 2021 estimates and likely implications for the forward multiple. The consensus top-down 2021 SPX EPS estimate is $170. The bottoms up estimate is $164. We’ve been using the mean of $167 with an above average forward multiple bouncing between 17x-20x to a upside target range of 2840-3300.