EPS Revisions Landscape: Global Profit Expectations are plagued with downgrades, but when does stability usually occur?· EPS downgrades persist, but globally revisions rarely get lower – Pg. 3Global profit expectations are in free-fall and the backdrop remains unhelpful and challenging for equity prices. Over the past month, sell-side analysts’ 3-month global EPS revisions have now hit levels that were last seen in Q4-2011. It is worth noting that over the past twenty years, global EPS revisions have only been lower on 3 separate occasions (LTCM, Post Tech. bubble, and GFC). Simply put, for EPS revisions to decline sharply from here, a major event has historically occurred leading to a profits recession.· 3 signs that usually precede stability in EPS expectations - Pg. 4Our base case scenario is that global profit revisions continue to shift lower, but we also believe this is now the ‘consensus view’ and has been well flagged. Instead, we think there is more value in highlighting signs that often precede a potential trough/ bottom in the EPS revisions cycle.History suggests when EPS revisions stabilise, often 1) falling price momentum stocks will outperform rising price momentum stocks, 2) manufacturing orders rise faster than inventories, and 3) usually this has occurred during Q1 and Q2, when seasonality supports rising stock prices and EPS revisions.· Global Industrial stocks appear to be improving - Pg. 5Page 23 shows the EPS revisions trend for the industrial sector across the regions. The latest data points appear to show improvements in almost every region of the world. In fact, we also find industrial stocks are showing some of the biggest improvements compared to most other sectors. Page 19 highlights attractive and unattractive industrial stocks based on combinations of EPS revisions and the European Q-Score. For example, Ferrovial, Vinci, SGS, Airbus and Siemens appear attractive, while Rolls Royce, Ap Moeller-Maersk, ABB, Safran and Schneider Electric appear unattractive.