European Earnings Set to Surprise on the Upside: Morgan Stanley
After five years of profit declines, European earnings are “highly likely” to grow strongly this year, and results for the 4Q of 2016 looks set to mark a return to positive growth, Morgan Stanley equity strategists including Matthew Garman and Graham Secker write in note.
- Given muted consensus expectations, improving macro backdrop, optimistic analyst survey, 4Q EPS will surprise to the upside
- MS sees European earnings growing 12% in 2017, reflecting moderate improvement in global GDP growth, higher margins, strong recovery in commodity earnings, moderate rebound in financials profitability
- MS has positive view going into earnings season on: ABB, BT, Deutsche Wohnen, Diageo, Evonik, Orange, ProSieben, SAP, Spectris, Subsea 7, Whitbread; negative view on Compass, Synthomer