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9 Jul 2013
Flash: European earnings revised downward – Goldman Sachs
FXstreet.com (New York) - According to the Economics Research Team at Goldman Sachs, “2013 European earnings have been revised down by almost 1% over the past month, bringing the overall decline since the beginning of the year to just over 7%.”
Expectations for cyclicals have fallen more, while financials earnings expectations have held up. Despite negative price performance, earnings expectations for EM-exposed stocks have remained comparable to the broader market. “We expect growth to reaccelerate in the second half of this year, which should support earnings expectations.” the team adds.
We revise down our 2013 earnings forecast, reflecting weaker economic growth in the first half of the year, and now expect 6% growth with only 1% for the non-financials part of the market. “We continue to expect 12% earnings growth next year. Over the last two weeks of July and the first week of August, 66% of the STOXX Europe 600 by market cap will report 2Q/1H earnings; we expect a small positive surprise versus expectations.”
Expectations for cyclicals have fallen more, while financials earnings expectations have held up. Despite negative price performance, earnings expectations for EM-exposed stocks have remained comparable to the broader market. “We expect growth to reaccelerate in the second half of this year, which should support earnings expectations.” the team adds.
We revise down our 2013 earnings forecast, reflecting weaker economic growth in the first half of the year, and now expect 6% growth with only 1% for the non-financials part of the market. “We continue to expect 12% earnings growth next year. Over the last two weeks of July and the first week of August, 66% of the STOXX Europe 600 by market cap will report 2Q/1H earnings; we expect a small positive surprise versus expectations.”