While being generally constructive on global equity markets in the intermediate term, even I am blown away by how European Earnings estimates continue to tick up in the last few weeks.Last week we put out the forward earnings estimates for the Stoxx 600 and I received many surprised comments/feedback from members. This week they have ticked up even further from last week’s note:
In the past week here’s how estimates have moved:
Q4: 10.7% to 10.8%
Q1: 16.5% to 16.7%
Q2: 8.6% remains at 8.6%
Q3: 15.7% to 16.1%
These are huge numbers. Even if you cut them in half, the growth rate for the Stoxx 600 (Europe) looks compelling in the intermediate term. Looking at sentiment and price behavior, the realization of 50% of these estimates is not priced in at present.
