

In 2019, Wall Street’s forecasters had high hopes for 2021 earnings. But when the pandemic hit, those expectations collapsed. The recovery has now brought expectations back to pre-pandemic levels.
Why it matters: Expected earnings are the key driver of stock prices in the long run.
By the numbers: Back in August 2019, analysts estimated that S&P 500 earnings per share would rise to $198 in 2021, according to FactSet.
- They revised those estimates down to a low of about $161 in June 2020.
- As of Aug. 5, that estimate returned to $198.08.
The big picture: Unfortunately, it’s incredibly difficult to accurately predict the future. Even when they’re looking six months out, Wall Street’s professional forecasters are often off target.
The bottom line: There’s a reason better-than-expected earnings are called an earnings "surprise."