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So what is the combined lowest analyst estimate? Surely at least one analyst has lowered '09 estimates on each S&P500 stock to dire expectations. Using that might give us an indication of the worst case scenario.


Last week, the low est. was $82 -- which is unchanged since mid-August, when it was $91. The high est. is $108, according to my numbers.


It also might be useful to note that the mean and median P/E ratio for the S&P 500 is roughly 15.4 for the last 5 years.


Are you using operating earnings in your calculations?
Shouldn't you be using reported earnings?

Based on S&P's earnings estimates (http://www2.standardandpoors.com/portal/site/sp/en/us/page.topic/indices_500/2,3,2,2,0,0,0,0,0,1,5,0,0,50,0,0.html)

12 MONTH OPER EARNS PER SHR (bot up) = 94.25
12 MONTH AS REPORTED EARNS PER SHR (top down) = 48.52

The S&P 500 index is now around 950, so that gives a P/E of a bit over 19.


@Phil, the numbers I referenced are 2009 *forecasted* earnings -- same as in the commentary above -- not trailing *reported* earnings.

Shawn Allen

Phil, is correct the 2009 forecast here of $95 is not GAAP earnings at all but is operating earnings. S&P currently shows that estimate updated to $86. Their forecast of actual GAAP earnings is (get ready to jump out the window) $49. Forward P/E of about 871/49 = 18 , not so cheap at all...

Read it and weep here


S&P itself has a nasty habit of reporting the forward operating P/E based on bottom up as THE P/E when in fact operating based on top-down is a higher P/E and actual GAAP earnings shows a much higher P/E.

Our author no doubt got mis-lead by S&P....

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