Bank Of America Lowers 2015 S&P 500 EPS Guidance, Cite Falling Oil Prices

Dan Suzuki and a team of analysts at Bank of America on Monday lowered their 2015 S&P 500 earnings per share forecast to $126 from a previous $127. "We are lowering our 2015 earnings per share forecast to reflect a weaker commodity price outlook, particularly for oil prices, which have fallen 30 percent from their July highs," the analysts wrote in a note to clients. The analysts add that the new 2015 earnings per share guidance “implies a modest slowdown” in earnings growth to an "easily achievable" 6 percent to 7 percent. The consensus 2015 earnings per share estimate is $130, 3 percent above Bank of America's forecast. 2014 EPS guidance of $118 remains unchanged at Bank of America and represents a 7.6 percent growth from a year ago. The analysts estimate that share buybacks among S&P 500 companies boosted EPS by around 1.5 percent in 2014, and a similar impact is expected next year. The analysts conclude that barring a recession, corporate margins are not expected to collapse, however margin expansion from current levels are not likely to play out.