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Another Big Batch of EPS Reports: Global Week Ahead
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This Global Week Ahead holds plenty — to keep both financial market traders and investors busy.
The week’s concerns include:
Another big batch of U.S and European earnings
Whether Powell and the FOMC are now at peak rates
The military conflict in Gaza, and
A possible policy rate hike in Australia
Next are Reuters’ five world market themes, reordered for equity traders—
(1) Another big week for U.S and European earnings reports.
The U.S. earnings recovery that investors had been hoping for after a lukewarm first half of the year is so far coming to pass, but a number of major tests are still to come.
With over 300 companies now reported, S&P500 earnings are estimated to be up +5% year-on-year with about 80% of firms coming in with forecast-beating numbers.
Later in the month, investors get to size up some of the major U.S. retailers, as well as the big winner of this year's AI frenzy, Nvidia (NVDA - Free Report) .
In Europe it's all about the money and the metal, with UBS on Tuesday, Commerzbank and ABN Amro on Wednesday, steel giant Arcelor Mittal on Thursday and insurance heavyweight Allianz on Friday.
(2) Have Chair Powell and Company finally hit the “neutral” rate?
Having marched interest rates all the way to the top of the hill, investors are now wondering whether the grand old dukes of the central bank world — the Fed, ECB, BoE & Co. — might soon be marching them down again.
Take the ECB — with Eurozone inflation coming down fast and the economy heading for either stagnation or recession, money markets now see rate cuts starting in April, while for the BoE in Britain it is next August.
The U.S. economy still looks impressively robust, but even there cracks are starting to show, if the sharp contraction in manufacturing data is anything to go by.
No wonder markets see a 70% chance that the Fed's brutal 20-month tightening cycle is over and that rate cuts could begin as soon as June.
That light at the end of the tunnel has meant world stocks have just had their best week of the year so far.
So, watch closely to see if the top central bankers push back against the cut chatter until inflation is truly tamed.
(3) A volatile Japanese yen makes central banker worries rise.
FX traders spent months nervously watching the yen inch towards 150 per dollar only to see the Bank of Japan itself shove it well over the line this week with a decidedly tepid plan to dismantle its decade-old stimulus program.
The yen shot straight back up when the markets sensed the Fed might finally have reached peak rates, so next week could be an interesting one.
While worries about 150 as a trigger have surely been washed away, the risk of BOJ intervention remains very real because both a weak yen and the current prime minister are increasingly unpopular with the Japanese public.
And as any top central banker will tell you, the time to intervene in your currency market is just after the tide has turned and the wind is on your back.
(4) The Israel-Hamas war continues.
This week marks a month since the deadly attack by Hamas in Israel triggered the worst escalation of the long-running Middle East conflict in decades.
Israeli forces have pushed into Gaza City in the north of the Gaza Strip, but are facing resistance from militant hit-and-run attacks from underground tunnels. Gaza health authorities say the Palestinian death toll now exceeds 9,000.
For those in the financial markets watching nervously, it is a crucial moment. Safe-haven gold has surged almost 10% since the troubles ignited but the initial spike in oil prices — triggered by fears Iran could be drawn into the crisis — has fully subsided and even Israel's shekel has started to bounce.
The situation could quickly spiral again, though.
An increasing number of countries are calling for a pause in hostilities, Hezbollah is agitating, while U.S. Secretary of State Antony Blinken is visiting Israel, Jordan and other countries in the region in the coming days for a new round of diplomatic talks.
(5) Will the Reserve Bank of Australia (RBA) hike on Melbourne Cup Day?
The famous Melbourne Cup horse race runs on Tuesday. But some of the shortest odds are on an Aussie central bank rate hike over in Sydney that day.
Following a hotter-than-expected third-quarter inflation print, where the RBA's preferred measure of core inflation rose to 1.2%, markets price a near 60% chance of a quarter point hike.
All of the "Big Four" Australian banks forecast a hike, too, including Westpac, where newly-installed chief economist Luci Ellis was until recently assistant governor at the RBA.
Indeed, futures imply a real risk that the 4.1% cash rate could be raised twice to 4.60% and kept there for all of 2024.
Three-year and 10-year Australian government bond yields have hit their highest since 2011, though backed off slightly on the Fed's hold. The Australian dollar has also rallied strongly against its New Zealand counterpart as rate expectations diverge.
Zacks #1 Rank (STRONG BUY) Stocks
(1) Zoom Video Communications (ZM - Free Report) : This is a $61 stock, with $18.1B in market cap, found in the Internet Software industry. I see a Zacks Value score of D, a Zacks Growth score of C and a Zacks Momentum score of F.
Image Source: Zacks Investment Research
Zoom Video Communications’ cloud-native unified communications platform, which combines video, audio, phone, screen sharing and chat functionalities, makes remote-working and collaboration easy. Undoubtedly, the company is benefiting from the work-from-home and online learning wave following the coronavirus pandemic outbreak that forced more and more people to stay home.
Zoom Video’s solutions include Zoom Meetings, Zoom Rooms, Zoom Phone (launched in 2019), Zoom Chat, Zoom Conference Room Connector, Zoom Video Webinars, Zoom for Developers and Zoom App Marketplace.
Zoom Video’s flagship solution Zoom Meetings provides high-definition video, voice, chat and content sharing across mobile devices, desktops, laptops, telephones and conference room systems. Zoom Meetings integrate with tools, such as Atlassian, Dropbox, Google, LinkedIn, Microsoft, Salesforce and Slack.
Moreover, Zoom Phone is an enterprise cloud phone system that provides inbound and outbound calling via its support for native connectivity to the public switched telephone network (PSTN). Further, Zoom Video Webinars ($40 per month per host) allow users to conduct large-scale online events. As of the fiscal year ended Jan 31, 2023, Zoom Phone provided native PSTN connectivity in more than 45 countries and territories.
Zoom Video went for an Initial Public Offering (IPO) on Apr 17th, 2019.
This San Jose, CA-based company reported revenues of $4.39 billion in fiscal 2023.
The company generates revenues from the sale of subscriptions to its video-first communications platform. Subscription revenues are driven primarily by the number of paid hosts as well as purchases of additional products, including Zoom Rooms, Zoom Video Webinars and Zoom Phone.
As of second-quarter fiscal 2024 ended Jul 31st, 2023, the company had approximately 3,672 customers contributing more than $100,000 in revenues in the trailing 12 months.
Zoom Video faces significant competition from Cisco Webex, LogMeIn GoToMeeting, Microsoft Teams, Google G Suite, Avaya, RingCentral and 8x8.
(2) W.R. Berkeley (WRB - Free Report) : This is a $68 stock, with $17.5B in market cap, found in the Property and Casualty Insurance industry. I see a Zacks Value score of B, a Zacks Growth score of C and a Zacks Momentum score of A.
Image Source: Zacks Investment Research
Founded in 1967 and based in Greenwich, CT., W.R. Berkley Corp. is a Fortune 500 company. It is one of the nation’s largest commercial lines property casualty insurance providers. The company offers a variety of insurance services from reinsurance, to workers comp third party administrators (TPAs).
Effective since first quarter of 2016, the company reports results in two segments – Insurance and Reinsurance. Insurance-Domestic operating units and Insurance-International operating units that were previously reported separately have been combined with the Insurance segment.
The two reporting segments are composed of individual operating units that serve a market defined by geography, products, services or industry served.
Insurance segment (87.8% of 2022 net premiums written) predominantly underwrites commercial insurance business primarily throughout the United States, although many units offer coverage globally. It mainly includes commercial insurance business, including excess and surplus lines, Industry Specialty, Product Specialty and Regional. The coverages are offered in the United States, United Kingdom, Continental Europe, South America, Canada, Scandinavia, Asia and Australia.
In addition to providing insurance products, certain operating units also provide a wide variety of fee-based services, including claims, administrative and consulting services.
Reinsurance segment (12.2%) is operated primarily on a facultative and treaty basis. It provides other insurance companies and self-insureds with assistance in managing their net risk through reinsurance on either a portfolio basis, through treaty reinsurance, or on an individual basis, through facultative reinsurance. The services are offered in the United States, United Kingdom, Continental Europe, Australia, the Asia-Pacific Region, and South Africa.
On Feb 22nd, 2022, the board of directors of W.R. Berkley approved a 3-for-2 stock split which was paid in the form of dividend to shareholders.
(3) Kubota (KUBTY - Free Report) : This is a $70 stock, with $16.3B in market cap, found in the Manufacturing Farm Equipment industry. I see a Zacks Value score of C, a Zacks Growth score of D and a Zacks Momentum score of C.
Image Source: Zacks Investment Research
Kubota is the world's largest maker of small tractors, and Japan's 2nd largest manufacturer of farm equipment.
The company is also Japan's largest producer of ductile iron pipe (for water supply and sewer systems) and its maker of roofing materials.
The company makes engines, construction machinery, industrial castings and machinery, waste recycling plants, and prefab housing, and pumps.
It has stakes in several U.S. computer companies, including memory storage makers Maxoptix and Akashic Memories.
Key Global Macro
I noted copious Mainland China macro data out across the coming trading week.
On Monday, the Eurozone HCOB composite PMI for October comes out. The prior reading was 46.5.
On Tuesday, Mainland China’s Exports (-6.2% y/y prior in SEP), Imports (-0.8% y/y prior in SEP), and USD trade balance for October ($77.7B prior in SEP) come out.
The Reserve Bank of Australia (RBA) policy rate (at 4.1%) may get hiked on this day — Melbourne Cup Day.
On Wednesday, the Bank of England’s (BoE) Governor Bailey gives a speech.
The Bank of Japan summary of opinions comes out.
The Eurozone’s retail sales for SEP come out. The prior y/y reading is -2.1%. Not good.
On Thursday, U.S. initial jobless claims for the recent week come out. These are still quite low, with a 210K 4-week moving average.
On Friday, Mainland China’s Foreign Direct Investment (FDI) comes out for OCT. The prior reading was a weak -8.4% y/y. Re-shoring is not a joke.
A preliminary reading of U. of Michigan consumer sentiment comes out for NOV. The prior reading was 63.8.
Conclusion
Let’s wrap up with the house earnings tally.
Done on Nov. 3rd, here are Zacks Research Director Sheraz Mian’s excerpts:
With Q3 results from more than 80% of S&P500 members already out, we can confidently say that actual results have once again turned out to be better than expected.
Keep in mind that Q3 earnings estimates had barely budged ahead of the start of the reporting cycle, which makes the outperformance all the more significant.
We continue to be of the view that while the overall earnings picture isn’t great, it isn’t falling off the cliff either. In fact, Q3 earnings growth is on track to turn positive, which follows three back-to-back quarters of declines.
On the negative side, the Q3 results show a notable loss of momentum on the revenues side, both in terms of the growth rate as well as the proportion of these companies beating top-line expectations.
An even more disconcerting development is on the revisions front, with estimates for the current (2023 Q4) and coming quarters starting to come down, which follows a relatively stable revisions trend over the preceding six months.
Here are the four notable features of the Q3 earnings season:
First, earnings growth is on track to turn positive. Q3 earnings for the 405 S&P 500 companies that have reported already are up +0.4% from the same period (up +5.6% excluding the Energy sector drag).
For the quarter as a whole, combining the actuals for these 405 companies with estimates for the still-to-come 95 index members, Q3 earnings are on track to increase by +1.5% on an equivalent growth in revenues.
Second, fewer companies have been able to beat Q3 revenue estimates. For the 405 S&P 500 members that have reported Q3 results, 82.5% are beating EPS estimates, and 61.5% are beating revenue estimates.
The revenue beats percentage is notably weaker. In fact, the 61.5% beats percentage for these 405 S&P 500 members is the lowest since the first quarter of 2020 when Covid got underway.
Third, the Tech sector has resumed its growth trajectory.
We still have a number of Tech sector companies that have yet to report Q3 results. But Q3 earnings for the 73.3% of Tech companies in the S&P 500 index that have already reported results are up +15.8% on +2.7% higher revenues.
For the quarter as a whole, combining the actuals that have come out with estimates for the still-to-come Tech companies, Q3 earnings are on track to increase +20.8% on +4.2% higher revenues.
Q3 earnings for the ‘Big 7 Tech Players’ increased +51% from the same period last year on +12.4% higher revenues, with the group’s growth picture expected to remain strong in the coming periods as well.
Fourth, estimates for the current and coming quarters have started coming down in a significant way over the last few weeks.
The expectation currently is for 2023 Q4 earnings to be up +1.9% from the same period last year on +2.7% higher revenues. This growth pace represents a notable decline from what was expected for the period in late September of +5.3% earnings growth on +3.6% higher revenues.
The cuts to Q4 earnings estimates are widespread, with estimates getting cut for 11 of the 16 Zacks sectors. The sectors suffering the biggest cuts include Autos, Medical, Transportation and Consumer Discretionary.
Have a great week trading and investing.
Warm regards,
John Blank Zacks Chief Equity Strategist and Economist
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Another Big Batch of EPS Reports: Global Week Ahead
This Global Week Ahead holds plenty — to keep both financial market traders and investors busy.
The week’s concerns include:
Next are Reuters’ five world market themes, reordered for equity traders—
(1) Another big week for U.S and European earnings reports.
The U.S. earnings recovery that investors had been hoping for after a lukewarm first half of the year is so far coming to pass, but a number of major tests are still to come.
With over 300 companies now reported, S&P500 earnings are estimated to be up +5% year-on-year with about 80% of firms coming in with forecast-beating numbers.
Heavy hitters in this week include eBay (EBAY - Free Report) and D.R. Horton (DHI - Free Report) on Tuesday and Walt Disney (DIS - Free Report) and Biogen (BIIB - Free Report) on Wednesday.
Later in the month, investors get to size up some of the major U.S. retailers, as well as the big winner of this year's AI frenzy, Nvidia (NVDA - Free Report) .
In Europe it's all about the money and the metal, with UBS on Tuesday, Commerzbank and ABN Amro on Wednesday, steel giant Arcelor Mittal on Thursday and insurance heavyweight Allianz on Friday.
(2) Have Chair Powell and Company finally hit the “neutral” rate?
Having marched interest rates all the way to the top of the hill, investors are now wondering whether the grand old dukes of the central bank world — the Fed, ECB, BoE & Co. — might soon be marching them down again.
Take the ECB — with Eurozone inflation coming down fast and the economy heading for either stagnation or recession, money markets now see rate cuts starting in April, while for the BoE in Britain it is next August.
The U.S. economy still looks impressively robust, but even there cracks are starting to show, if the sharp contraction in manufacturing data is anything to go by.
No wonder markets see a 70% chance that the Fed's brutal 20-month tightening cycle is over and that rate cuts could begin as soon as June.
That light at the end of the tunnel has meant world stocks have just had their best week of the year so far.
So, watch closely to see if the top central bankers push back against the cut chatter until inflation is truly tamed.
(3) A volatile Japanese yen makes central banker worries rise.
FX traders spent months nervously watching the yen inch towards 150 per dollar only to see the Bank of Japan itself shove it well over the line this week with a decidedly tepid plan to dismantle its decade-old stimulus program.
The yen shot straight back up when the markets sensed the Fed might finally have reached peak rates, so next week could be an interesting one.
While worries about 150 as a trigger have surely been washed away, the risk of BOJ intervention remains very real because both a weak yen and the current prime minister are increasingly unpopular with the Japanese public.
And as any top central banker will tell you, the time to intervene in your currency market is just after the tide has turned and the wind is on your back.
(4) The Israel-Hamas war continues.
This week marks a month since the deadly attack by Hamas in Israel triggered the worst escalation of the long-running Middle East conflict in decades.
Israeli forces have pushed into Gaza City in the north of the Gaza Strip, but are facing resistance from militant hit-and-run attacks from underground tunnels. Gaza health authorities say the Palestinian death toll now exceeds 9,000.
For those in the financial markets watching nervously, it is a crucial moment. Safe-haven gold has surged almost 10% since the troubles ignited but the initial spike in oil prices — triggered by fears Iran could be drawn into the crisis — has fully subsided and even Israel's shekel has started to bounce.
The situation could quickly spiral again, though.
An increasing number of countries are calling for a pause in hostilities, Hezbollah is agitating, while U.S. Secretary of State Antony Blinken is visiting Israel, Jordan and other countries in the region in the coming days for a new round of diplomatic talks.
(5) Will the Reserve Bank of Australia (RBA) hike on Melbourne Cup Day?
The famous Melbourne Cup horse race runs on Tuesday. But some of the shortest odds are on an Aussie central bank rate hike over in Sydney that day.
Following a hotter-than-expected third-quarter inflation print, where the RBA's preferred measure of core inflation rose to 1.2%, markets price a near 60% chance of a quarter point hike.
All of the "Big Four" Australian banks forecast a hike, too, including Westpac, where newly-installed chief economist Luci Ellis was until recently assistant governor at the RBA.
Indeed, futures imply a real risk that the 4.1% cash rate could be raised twice to 4.60% and kept there for all of 2024.
Three-year and 10-year Australian government bond yields have hit their highest since 2011, though backed off slightly on the Fed's hold. The Australian dollar has also rallied strongly against its New Zealand counterpart as rate expectations diverge.
Zacks #1 Rank (STRONG BUY) Stocks
(1) Zoom Video Communications (ZM - Free Report) : This is a $61 stock, with $18.1B in market cap, found in the Internet Software industry. I see a Zacks Value score of D, a Zacks Growth score of C and a Zacks Momentum score of F.
Image Source: Zacks Investment Research
Zoom Video Communications’ cloud-native unified communications platform, which combines video, audio, phone, screen sharing and chat functionalities, makes remote-working and collaboration easy. Undoubtedly, the company is benefiting from the work-from-home and online learning wave following the coronavirus pandemic outbreak that forced more and more people to stay home.
Zoom Video’s solutions include Zoom Meetings, Zoom Rooms, Zoom Phone (launched in 2019), Zoom Chat, Zoom Conference Room Connector, Zoom Video Webinars, Zoom for Developers and Zoom App Marketplace.
Zoom Video’s flagship solution Zoom Meetings provides high-definition video, voice, chat and content sharing across mobile devices, desktops, laptops, telephones and conference room systems. Zoom Meetings integrate with tools, such as Atlassian, Dropbox, Google, LinkedIn, Microsoft, Salesforce and Slack.
Moreover, Zoom Phone is an enterprise cloud phone system that provides inbound and outbound calling via its support for native connectivity to the public switched telephone network (PSTN). Further, Zoom Video Webinars ($40 per month per host) allow users to conduct large-scale online events. As of the fiscal year ended Jan 31, 2023, Zoom Phone provided native PSTN connectivity in more than 45 countries and territories.
Zoom Video went for an Initial Public Offering (IPO) on Apr 17th, 2019.
This San Jose, CA-based company reported revenues of $4.39 billion in fiscal 2023.
The company generates revenues from the sale of subscriptions to its video-first communications platform. Subscription revenues are driven primarily by the number of paid hosts as well as purchases of additional products, including Zoom Rooms, Zoom Video Webinars and Zoom Phone.
As of second-quarter fiscal 2024 ended Jul 31st, 2023, the company had approximately 3,672 customers contributing more than $100,000 in revenues in the trailing 12 months.
Zoom Video faces significant competition from Cisco Webex, LogMeIn GoToMeeting, Microsoft Teams, Google G Suite, Avaya, RingCentral and 8x8.
(2) W.R. Berkeley (WRB - Free Report) : This is a $68 stock, with $17.5B in market cap, found in the Property and Casualty Insurance industry. I see a Zacks Value score of B, a Zacks Growth score of C and a Zacks Momentum score of A.
Image Source: Zacks Investment Research
Founded in 1967 and based in Greenwich, CT., W.R. Berkley Corp. is a Fortune 500 company. It is one of the nation’s largest commercial lines property casualty insurance providers. The company offers a variety of insurance services from reinsurance, to workers comp third party administrators (TPAs).
Effective since first quarter of 2016, the company reports results in two segments – Insurance and Reinsurance. Insurance-Domestic operating units and Insurance-International operating units that were previously reported separately have been combined with the Insurance segment.
The two reporting segments are composed of individual operating units that serve a market defined by geography, products, services or industry served.
Insurance segment (87.8% of 2022 net premiums written) predominantly underwrites commercial insurance business primarily throughout the United States, although many units offer coverage globally. It mainly includes commercial insurance business, including excess and surplus lines, Industry Specialty, Product Specialty and Regional. The coverages are offered in the United States, United Kingdom, Continental Europe, South America, Canada, Scandinavia, Asia and Australia.
In addition to providing insurance products, certain operating units also provide a wide variety of fee-based services, including claims, administrative and consulting services.
Reinsurance segment (12.2%) is operated primarily on a facultative and treaty basis. It provides other insurance companies and self-insureds with assistance in managing their net risk through reinsurance on either a portfolio basis, through treaty reinsurance, or on an individual basis, through facultative reinsurance. The services are offered in the United States, United Kingdom, Continental Europe, Australia, the Asia-Pacific Region, and South Africa.
On Feb 22nd, 2022, the board of directors of W.R. Berkley approved a 3-for-2 stock split which was paid in the form of dividend to shareholders.
(3) Kubota (KUBTY - Free Report) : This is a $70 stock, with $16.3B in market cap, found in the Manufacturing Farm Equipment industry. I see a Zacks Value score of C, a Zacks Growth score of D and a Zacks Momentum score of C.
Image Source: Zacks Investment Research
Kubota is the world's largest maker of small tractors, and Japan's 2nd largest manufacturer of farm equipment.
The company is also Japan's largest producer of ductile iron pipe (for water supply and sewer systems) and its maker of roofing materials.
The company makes engines, construction machinery, industrial castings and machinery, waste recycling plants, and prefab housing, and pumps.
It has stakes in several U.S. computer companies, including memory storage makers Maxoptix and Akashic Memories.
Key Global Macro
I noted copious Mainland China macro data out across the coming trading week.
On Monday, the Eurozone HCOB composite PMI for October comes out. The prior reading was 46.5.
On Tuesday, Mainland China’s Exports (-6.2% y/y prior in SEP), Imports (-0.8% y/y prior in SEP), and USD trade balance for October ($77.7B prior in SEP) come out.
The Reserve Bank of Australia (RBA) policy rate (at 4.1%) may get hiked on this day — Melbourne Cup Day.
On Wednesday, the Bank of England’s (BoE) Governor Bailey gives a speech.
The Bank of Japan summary of opinions comes out.
The Eurozone’s retail sales for SEP come out. The prior y/y reading is -2.1%. Not good.
On Thursday, U.S. initial jobless claims for the recent week come out. These are still quite low, with a 210K 4-week moving average.
On Friday, Mainland China’s Foreign Direct Investment (FDI) comes out for OCT. The prior reading was a weak -8.4% y/y. Re-shoring is not a joke.
A preliminary reading of U. of Michigan consumer sentiment comes out for NOV. The prior reading was 63.8.
Conclusion
Let’s wrap up with the house earnings tally.
Done on Nov. 3rd, here are Zacks Research Director Sheraz Mian’s excerpts:
With Q3 results from more than 80% of S&P500 members already out, we can confidently say that actual results have once again turned out to be better than expected.
Keep in mind that Q3 earnings estimates had barely budged ahead of the start of the reporting cycle, which makes the outperformance all the more significant.
We continue to be of the view that while the overall earnings picture isn’t great, it isn’t falling off the cliff either. In fact, Q3 earnings growth is on track to turn positive, which follows three back-to-back quarters of declines.
On the negative side, the Q3 results show a notable loss of momentum on the revenues side, both in terms of the growth rate as well as the proportion of these companies beating top-line expectations.
An even more disconcerting development is on the revisions front, with estimates for the current (2023 Q4) and coming quarters starting to come down, which follows a relatively stable revisions trend over the preceding six months.
Here are the four notable features of the Q3 earnings season:
First, earnings growth is on track to turn positive. Q3 earnings for the 405 S&P 500 companies that have reported already are up +0.4% from the same period (up +5.6% excluding the Energy sector drag).
For the quarter as a whole, combining the actuals for these 405 companies with estimates for the still-to-come 95 index members, Q3 earnings are on track to increase by +1.5% on an equivalent growth in revenues.
Second, fewer companies have been able to beat Q3 revenue estimates. For the 405 S&P 500 members that have reported Q3 results, 82.5% are beating EPS estimates, and 61.5% are beating revenue estimates.
The revenue beats percentage is notably weaker. In fact, the 61.5% beats percentage for these 405 S&P 500 members is the lowest since the first quarter of 2020 when Covid got underway.
Third, the Tech sector has resumed its growth trajectory.
We still have a number of Tech sector companies that have yet to report Q3 results. But Q3 earnings for the 73.3% of Tech companies in the S&P 500 index that have already reported results are up +15.8% on +2.7% higher revenues.
For the quarter as a whole, combining the actuals that have come out with estimates for the still-to-come Tech companies, Q3 earnings are on track to increase +20.8% on +4.2% higher revenues.
Q3 earnings for the ‘Big 7 Tech Players’ increased +51% from the same period last year on +12.4% higher revenues, with the group’s growth picture expected to remain strong in the coming periods as well.
Fourth, estimates for the current and coming quarters have started coming down in a significant way over the last few weeks.
The expectation currently is for 2023 Q4 earnings to be up +1.9% from the same period last year on +2.7% higher revenues. This growth pace represents a notable decline from what was expected for the period in late September of +5.3% earnings growth on +3.6% higher revenues.
The cuts to Q4 earnings estimates are widespread, with estimates getting cut for 11 of the 16 Zacks sectors. The sectors suffering the biggest cuts include Autos, Medical, Transportation and Consumer Discretionary.
Have a great week trading and investing.
Warm regards,
John Blank
Zacks Chief Equity Strategist and Economist