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Investing.com – UBS forecasts an 8.4% annual increase in earnings per share (EPS) for the fourth quarter of 2024.
Although it appears to be slower than the growth seen in previous quarters, UBS expects the final figures to be adjusted closer to 12%, supported by historical trends of upward revisions. A similar trend was seen in Q3, where EPS growth ended at 8.9%, exceeding the previous estimate of 4%.
“Earnings estimates follow a predictable pattern: they start very high, are revised to low levels during the reporting period, and are offset by actual results,” UBS strategists led by Jonathan Golub said in a note. .
“Over the past 2 months, 4Q estimates have remained flat, defying the usual downward trend. However, this recent strength is due to technology-related companies,” they added. to say.
The technology sector continues to dominate earnings growth, with TECH+ expected to rise 20.4%, compared to just 2.5% for non-tech sectors.
However, consensus EPS growth estimates for technology companies are mixed, UBS points out. For example, Nvidia (NASDAQ: ) is expected to see its earnings rise by 62%, followed by Amazon (NASDAQ: ) at 52.6%, and Alphabet (NASDAQ: ) at 26.1%.
At the same time, other technology giants, such as Microsoft (NASDAQ:) and Apple (NASDAQ:), are expected to provide moderate growth of 6.9% and 11.6%, respectively.
TECH+ played a key role in driving Q4 growth, accounting for seven of the top ten contributors and adding 5.2% to the overall S&P 500 EPS increase as a group.
On the other hand, Matla is pulling in overall performance, and EPS is expected to decrease by 27.5%. The sector has been balancing earnings through 2024 due to ongoing challenges.
Meanwhile, stocks are poised to deliver strong growth of 17.8%, largely driven by the largest investment banks, such as Bank of America Corp (NYSE: ), JPMorgan Chase (NYSE: ), and Morgan Stanley (NYSE:), which benefits from early interest rates.
“In general, it is expected to be the fastest growing group, surpassing TECH + (10.5% vs. 8.5%),” UBS highlights.
Interestingly, updates to Q4 earnings estimates have been more negative than usual, strongly focused on technology-related companies. Over the past two months, estimates have remained flat, defying corrections seen ahead of the reporting period.
UBS shows that the first reporters – 20 companies with the last quarter – exceeded expectations by 4.3%, slightly below the long-term average of 4.8%, although it is slightly less than go through recent sites.
