(Full note attached)
By all accounts it was a strong Q1 results season for European stocks. Our
European Quantitative Strategy team’s weekly summaries show that of the 80% of
firms that have reported to date, 58% have beaten earnings expectations – the
strongest number since Q3 ’10 – and the sales beats ratio stands at 64% – its
highest point in more than five years.
Not just the FX and flow show
We show that company fundamentals often outweighed flow from an earnings
perspective (Banks, Oil & Gas) and the leading sales beats were in sectors with the
greatest exposure to the FX tailwinds (Autos, Travel & Leisure). A number of one-off
market-specific events also had a greater than expected impact on the season
(Utilities and Insurance), while the relative strength of the macro environment in end
markets was another defining theme (Retail).