NVDA Q3 Earnings Alert: Why our AI stock picker is still holding Nvidia stockRead More

Q2 earnings season saw EPS growth improving in Europe, US: Barclays

Published 22/08/2024, 01:12 am
© Reuters.

The Q2 earnings season saw a notable improvement in EPS growth across both Europe and the U.S., according to Barclays (LON:BARC) analysts.

The bank explained in a note Wednesday that EPS growth in Europe rose by 3%, while the U.S. experienced a more significant increase of 10%, both well above consensus estimates.

As the earnings season progressed, these blended growth numbers improved materially, reflecting a stronger-than-expected performance.

In the U.S., earnings beats improved compared to previous quarters, signaling a positive shift.

However, in Europe, while earnings beats were solid, they fell slightly below those seen in the prior quarter, according to Barclays.

Despite these decent earnings, markets reacted negatively, influenced by a more cautious tone from companies regarding their full-year outlooks.

This cautious sentiment overshadowed the resilient margins and strong capital returns reported by many firms.

Barclays notes that full-year earnings momentum initially turned lower as the results season began, primarily due to underperformance in cyclical sectors.

These sectors were identified as the primary laggards, dragging down Q2 beats and FY24 EPS momentum. However, Barclays highlights that this downward trend has stabilized recently, offering some optimism moving forward.

The bank says that Financials, in particular, stood out during the earnings season, with strong performances leading to upgrades that helped offset some of the negative revisions in other sectors.

Barclays also pointed out that the pullback in Tech and Semiconductor stocks seems "overdone" when compared to their earnings performance, suggesting potential opportunities in these areas.

While Q2 earnings showed robust growth, particularly in the U.S., the market's cautious outlook on future earnings dampened the positive momentum. Nonetheless, with stabilization in earnings momentum and opportunities in certain sectors, the overall outlook remains cautiously optimistic.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.