“Nordic EPS revisions remains stubbornly negative, 93 downgrades and 43 upgrades.” (Handelsbanken)
Complete disconnect between PMI and EPS revisions.
Analysts tend to be very optimistic and expectations tend to be very inaccurate. Gradually revised and reduced. Executives love to low-ball estimates and often they are going to great lengths to underpromise and manage expectations so they can deliver and beat consensus expectations.
Forward earnings expectations throughout any given year.
“Continued trend of downward STOXX 600 earnings revisions. Over the past month, 2014 earnings estimates have declined by 1.5%. 2014 consensus earnings growth is now expected to be +8.4%.” (Goldman Sachs)
“Lots of downward revisions through February. I believe they are consistent with subpar global economic growth. Keep in mind that analysts tend to be too optimistic, so their estimates tend to be revised downwards. Nevertheless, NERIs tend to be positive when an economy is growing fast, especially during economic recoveries. They can be negative when economic growth is steady and middling. They always go negative during recessions since industry analysts aren’t any better than economists at foreseeing economic downturns.”
“Somewhat concerning that analysts’ earnings revisions remain mostly negative in Europe and Asia ex-Japan – we expect this to change as growth continues to improve.” (Goldman Sachs)