Corporate earnings in 2019: A fading momentum is in store!

Tuesday 23 October 2018

Research / Market

Key Insights:

After two years of strong earnings momentum, EPS growth is expected to decline considerably from 2019.

Between global growth reaching its climax, the fading impact of US tax reform, the declining contribution of oil and commodities and the rising wage costs and tariffs, the consensus is likely to be negatively surprised.

MSCI ACWI EPS growth which amounted to +17% in 2017 and is estimated at +16% in 2018, could fall to +7% in 2019, instead of +10% expected by the IBES consensus.

Although it is unlikely that market PE will rise in the latter part of the cycle, the prospect of a downgrading of consensus figures could weigh on the equity markets.

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