Gavekal Capital: Earning Estimates Plunging Around The World

Monday, March 10, 2014

Earning Estimates Plunging Around The World

Earnings estimates (and sales estimates to an extent) have taken a beating over the past three months. On average, EPS growth estimates are down 5.3% for the next fiscal year during this time. Not a single industry group out of the 24 MSCI classifications have seen their earning estimates rise and only four industries have seen their sales growth estimate increase. Europe has seen the worst of it. On average, FY1 EPS estimates have dropped by 8%. That number for Asia-Pacific and North America are -4.7% and -4%, respectively.

MSCI World

Only 40% of stocks have seen a positive EPS revision in the past three months, with no individual industry having more than 59% of their stocks seeing positive revisions. Household and Personal Products have had the worse revision ratio with only 17% of the stocks having a positive revision in the past three months. Somewhat amazingly stocks are up nearly 5% during this time.