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Analysts at JPMorgan said the consensus earnings forecast was too aggressive.
With more than 60% of the market capitalization of the S&P 500 and STOXX 600 set to report in the next two weeks, earnings growth momentum is The global economy is expected to rebound, but the outlook may be too optimistic, according to strategists at JPMorgan.
S&P 500 (SP500) EPS outlook remains stable over the year, with EPS growth in Europe lagging.
But for the rest of 2024, earnings are expected to rise 15% between the first and fourth quarters, but JPMorgan analysts said in a note that those estimates are “too aggressive in our view, especially if growth indicators continue to falter.”
They said the current 15% forecast is well above the 8% average growth historically seen in fourth-quarter EPS, compared to the first quarter.
Analysts said the market was trading near highs and positioning was tense, “leaving little room to absorb any disappointments.”
Furthermore, US corporate sentiment on margins is also likely to move lower during the upcoming earnings season, in our view, driven by a combination of consumer weakness and a shift in pricing power.
Companies with profit warnings this quarter:
- YouGov Plc (OTCPK:YUGVF) – Daily Performance vs Market: -47.2%
- SIG Group AG (OTCPK:SIGCY) – Daily performance vs. market: -5.8%
- Airbus SE (OTCPK:EADSF) – Daily Performance vs Market: -9.2%
- Pool Corp. (POOL) – Daily Performance vs Market: -8.4%
- Southwest Airlines Co. (LUV) – Daily Performance vs Market: -0.4%
- Walgreens Boots Alliance Inc. (WBA) – Daily Performance vs Market: -22.2%
- H&M Hennes & Mauritz AB (OTCPK:HNNMY) – Daily performance vs market: -12.5%
- Nike Inc. (NKE) – Daily Performance vs. Market: -19.6%
- Air France (OTCPK:AFRAF) – Daily performance vs market: -1.9%
- Nanoco Group Plc (OTCPK:NNOCF) – Daily Performance vs Market: -24.3%
- Norwegian Air Shuttle ASA (OTCPK:NWARF) – Daily Performance vs Market: -17%
- Dassault Systemes SE (OTCPK:DASTY) – Daily performance vs market: -4.2%
- Indivior Plc (INDV) – Daily Performance vs Market: -35.3%
- PageGroup Plc (OTCPK:MPGPF) – Daily Performance vs Market: -3.3%
- Volkswagen AG (OTCPK:VWAGY) – Daily Performance vs Market: -1.2%
- Deutsche Lufthansa AG (OTCQX:DLAKF) – Daily Performance vs Market: -0.1%
- Topdanmark A/S (OTCPK:TPDKY) – Daily performance vs market: -0.6%
- Hugo Boss AG (OTCPK:BOSSY) – Daily performance vs. market: -1.9%
- AutoNation Inc. (AN) – Daily Performance vs Market: 1.7%
- Burberry Group Plc (OTCPK:BURBY) – Daily Performance vs Market: -15.2%
- Lindex Group (not included) – Daily performance vs. market: -6.3%
- Swatch Group (OTCPK:SWGAY) – Daily Performance vs Market: -8.8%
- Spirit Airlines Inc. (SAVE) – Daily Performance vs Market: 2.3%
- Scor SE (OTCPK:SZCRF) – Daily Performance vs Market: -24.3%
- Leslie’s Inc. (LESL) – Daily Performance vs Market: -1.1%
- United Airlines Holdings Inc. (UAL) – Daily Market Performance: 0%.