The forward earnings estimates are probably BS, via Bill Hester: "Two observations stand out. First, current forecasts, especially for next year, imply sales growth at roughly twice the expected pace of GDP. Historically that typically has occurred when the U.S. economy was coming out of a recession. Second, sales growth is projected to exceed GDP growth for each of the next three years. This would not be unprecedented, but taken together, these assumptions represent the first clear sign of elevated optimism in the forecasts. On the earnings side, expectations are even more ambitious. Earnings growth is projected to run at roughly twice the pace of sales growth, implying meaningful margin expansion. For example, earnings are expected to grow by about 20% in 2027. This is again the type of growth that typically occurs in post-recession environments, when sales rebound and labor costs remain below pre-contraction levels."
