Gavekal Capital: Next 12 Month Sales Estimates For MSCI North America Lowest Since 2009

Tuesday, November 18, 2014

Next 12 Month Sales Estimates For MSCI North America Lowest Since 2009

Last week we looked at how sales growth estimates for the next fiscal year are now negative for five of the 10 MSCI World Index sectors. Today, we are again looking at estimates but this time from a forward 12-month perspective. Sales for the MSCI World Index are only expected to grow by 3% over the next 12 months according to estimates (blue line below). This is about 2% lower than expected in July. EPS for the MSCI World Index are expected to grow by 9% over the next 12 months which is about 1.5% lower than expected in July.

Looking at this data by region, we find that MSCI Pacific has had the sharpest decline in sales and EPS growth estimates. In July, sales were expected to grow by over 6% over the next 12 months. This has now fallen to just over 1%. Also in July, EPS were expected to grow by 10% and this has now fallen to 6%.

Growth estimates for MSCI North America have remained relatively flat. EPS are expected grow by 10% over the next 12 months and sales are expected to grow just under 5%. The current expected growth rate for sales, however, is the lowest growth rate for the next 12 months since 2009 by a slim margin.

Finally, expectations for MSCI Europe have slightly improved since the beginning of October. Currently, sales are expected to grow by 3% (up from 2%) over the next 12 months and EPS are expected to grow by 9% (up from 8%) over the next 12 months.

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