US | Q1 earnings: upward revisions continue for now
US earnings growth continues to surprise to the upside, with more cyclical sectors leading the way in the Q1 earnings season. This positive momentum supports our existing overweights on Financials, Materials and Industrials.
However, longer-term expectations appear overly optimistic. The bottom-up consensus points to an ongoing profit margin expansion over the next few years and we think this is unlikely against a backdrop of rising cost pressures and proposals for higher corporate tax rates.
We see scope for downward revisions to EPS forecasts as attention turns towards 2022 later this year, and this could prove a headwind for US equities in the context of elevated valuation multiples.
Tags:
Related Services
Post
After the presidential debate, the US election remains a toss-up
Though Vice President Kamala Harris' chances of winning the election have improved since her debate with former President Donald Trump, we aren't changing our subjective odds for the outcome of the 2024 presidential contest.
Find Out More
Post
Introducing our US immigration tracker
We created a real-time tracker of unauthorized migrants to the US, the driving force behind the nation's post-pandemic immigration surge. New undocumented migrants in the US will total 2.3mn this year, nearly 1mn lower than in 2023.
Find Out More