European quarterly, BofA: EPS down 11% year-on-year

European quarterly reports BofA monetary tightening and decline in US

(Finance) – With over 40% of European companies who published their 2023 results, the earnings growth in the fourth quarter is -11% year-over-year, well below the 0% growth seen at the start of the season, but slightly better than the -13% consensus forecast. We read this in an analysis by BofA Global Research.

Basic materials (-56%), energy (-28%) and industrials (-28%) recorded the weakest year-on-year growth, while growth in healthcare (14%) and technology (12%) %) was the strongest. The results of the sectors energy and financial had the largest impact on the index’s earnings, with EPS growth for the Stoxx 600 excluding energy of -3%, and net financial sector growth of -19%.

THE results above expectations as for sales and EPS by Stoxx companies are at 37% and 48%, respectively, the lowest since 2016 and 2019. Among sectors, technology (75%) and telecommunications (67%) have achieved the highest profits so far strongest stocks, while construction materials (29%) and insurance (33%) recorded the weakest results.

The Stoxx 600 consensus EPS expectations for 2024 and 2025 they are down 4% and 3% respectively since October, weighed down by cuts to energy and healthcare, while banks remain the main support. This has led to EPS growth expectations for 2024 falling to a new low of 4.6%, while EPS growth for 2025 stands at a peak of 9.9%.

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