Expectations vs Reality

| Multi Asset | Market Charts

Going into this earnings season, analyst expectations were fairly dour and thus relatively modest results were enough to clear these low hurdles. For firms in the S&P 500, EPS growth stands at 7% on a year-on-year (yoy) basis, surprising by 19%. Indeed, the EPS of nearly 80% of firms beat expectations.

Although the reporting season in Europe is not as far along, results there are also noteworthy: EPS growth is down -15% on a yoy basis, but 70% of firms have beat their estimates with an aggregate surprise of 12%. Clearly, Europe’s tighter restrictions at the end of last year had a significant impact on demand, though firms seem to be leaner and better able to absorb the loss in revenue.

 

Expectations vs Reality
Source: Bloomberg, Unigestion. Data as at 12 February 2021.


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