EPS Estimates are Falling for Most Stocks in the World, Driven by Europe

Earnings estimates have been coming down for most companies across the developed markets, and the decline is almost entirely driven by Europe. In the charts below we show the percent of companies that have seen their EPS estimates rise vs three months ago.

For the World Index, only 46% have seen rising estimates, meaning that 54% have seen falling estimates. A closer look at the regional breakdown shows that Europe is to blame. Indeed, in North America 57% of companies have seen rising estiamtes vs three months ago and in Asia 55% of companies have experienced rising estimates (though the trend is down in both regions). In Europe, however, only 18% of companies have experienced rising estimates. When we break down the EPS estimate revisions for Europe by sector (last three charts below) we observe that the decline has been driven heavily by the most cyclical sectors of the economy (industrials, tech, and materials).