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In JPMorgan’s equity strategy note Friday, analysts said US earnings and sales delivery are “significantly outpacing” that of Europe.
We are more than halfway through the fourth quarter reporting season in the US, with 60% of companies having reported. Analysts noted in Europe, 33% of companies have released Q4 earnings so far.
“Earnings growth is tracking at +5% y/y [year-on-year] in the US, and -8% y/y in Europe,” they wrote. “Post a period of substantial downgrades to EPS estimates into the earnings season, S&P500 blended Q4 EPS has inflected higher, as per usual.”
In the US, JPMorgan revealed that 78% of S&P500 companies that have reported beat EPS estimates, with EPS growth for these companies at +5% year-on-year, surprising positively by 8%.
Meanwhile, in Europe, of the Stoxx600 companies that have reported so far, half have beaten EPS estimates. “Q4 looks to be another weak quarter in Europe, with EPS growth at -8% y/y, surprising negatively by 4%,” analysts added.
“At a regional level, US earnings and sales delivery is significantly outpacing that of Europe,” stated analysts. “US vs Europe EPS growth stands at +13% y/y for the 2nd quarter in a row. The rebound in US vs European earnings that started mid-last year, and post the soft 2022 patch, is supportive of our preference for US over European equities.”
