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Data: FactSet; Chart: Axios Visuals

Despite cutting expectations for companies' earnings by the most in history and revenue by the most since 2009, Wall Street analysts are getting increasingly bullish on the overall direction of the U.S. stock market.

What's happening: Equity analysts are expecting earnings in the second quarter to fall by 43.8% — the most since 2008's fourth quarter 69.1% decline.

  • They also project earnings this year to decline by 28.6%, the largest decrease in the annual EPS estimates for the index over the first six months of the year since FactSet began tracking the data in 1996.
  • Revenue estimates, too, have been cut back significantly, with year-over-year revenue expected to fall 11.2% in Q2, which would mark the steepest decline since Q2 2009 (11.5%).

Of note: Through Thursday, 185 S&P 500 companies had withdrawn or confirmed a previous withdrawal of annual EPS guidance for fiscal year 2020 or FY 2021 and just 49 have issued EPS guidance for Q2 2020.

  • The number of companies issuing EPS guidance to date for Q2 2020 is less than half the 5-year average for a quarter of 106.

On the other hand: Price targets for the S&P have steadily risen in recent weeks with data now showing the average bottom-up, year-end target price is 3328.37 — 6% above the index's current level, FactSet senior earnings analyst John Butters points out in note to clients.

  • Of the 10,356 analyst ratings of individual S&P companies, 52.7% are buy ratings, 41.1% are hold ratings, and 6.2% are sell ratings.

Between the lines: The expectations for higher stock prices also defy already frothy valuations.

  • The S&P 500's forward 12-month price-to-earnings ratio is 21.8, well above the index's five-year average of 16.9 and 10-year average of 15.2.
  • At the end of the first quarter, the S&P's forward 12-month P/E ratio was 15.6.

By the numbers: "Since the end of the first quarter (March 31), the price of the index has increased by 20.6%, while the forward 12- month EPS estimate has decreased by 12.7%," Butters notes.

Go deeper

Oct 14, 2020 - Health

The pandemic isn't keeping the health care industry down

Illustration: Aïda Amer/Axios

Health care's third-quarter earnings season has started, and if the quarter is anything like the previous one, the industry will continue to fare relatively well even amid the broader economic turmoil.

The bottom line: The coronavirus dominated the spring and summer, which forced people to put off care, but people have resumed getting procedures and seeing their doctors.

Updated 6 hours ago - Energy & Environment

Bomb cyclone prompts blizzard warnings from Virginia to Maine

Computer model projection showing the intense storm off of Cape Cod on Jan 29, 2022, with heavy snow and strong winds lashing the coastline. (Weatherbell.com)

Blizzard warnings are in effect for 11 million people from coastal Virginia to eastern Maine as a historic winter storm is set to slam the Mid-Atlantic and Northeast beginning Friday.

Why it matters: The storm will bring hazards ranging from zero visibility amid hurricane force wind gusts and heavy snow, to coastal flooding that will erode vulnerable beaches and threaten property from the Jersey shore to coastal Massachusetts.

Updated 6 hours ago - Politics & Policy

Omicron dashboard

Illustration: Shoshana Gordon/Axios

  1. Health: Contact tracing fizzles across America — New clues emerge on long COVID — Omicron is finally burning out — It's very difficult to get access to antiviral COVID treatments — Axios-Ipsos poll: Omicron's big numbersAnother wave of death — FDA limits use of Regeneron and Lilly antibody treatments.
  2. Vaccines: Pfizer begins clinical trial for Omicron-specific vaccine — The shifting definition of fully vaccinated.
  3. Politics: Virginia AG says public colleges can't mandate COVID vaccines —Alaska governor joins Texas lawsuit over National Guard vaccine mandate — Navy discharges 45 sailors for refusing vaccine — Spotify to remove Neil Young's music after his Joe Rogan ultimatum — White House: 60M households have ordered free COVID-19 rapid tests.
  4. World: U.K. to lift travel testing requirement for fully vaccinated — Beijing Olympic Committee lowers testing threshold ahead of Games.
  5. Variant tracker