ab15 February 2024Global Research and Evidence LabUS Equity StrategyEarnings Brief 4Q23: Feb 1582.2% of the S&P 500's market cap has reported. 4Q expectations are for revenues to grow 3.3% and EPS by 9.5%. Growth among groups varies significantly, as shown in the table below (a blend of reported results and consensus estimates for unreported companies): GroupEPS Growth (%)TECH+40.3Financials11.1Non-Cyclical ex Health Care 7.1Industrials & Disc ex Internet Retail4.9Health Care-10.8Energy & Materials-21.2Earnings are beating estimates by 7.1% in aggregate, with 71% of companies topping projections. EPS is on pace for 10.8%, assuming the current beat rate for the rest of this season.Firms beating on both revenues and EPS are outperforming the market by 1.5% vs. a historical average of 1.7%, while ones missing on both are underperforming by -3.9% vs. -3.1%.Over the next 5 trading days, 55 companies representing 9.1% of the S&P 500's market cap will report results, including Home Depot, Walmart, NVIDIA, Synopsys, and Intuit. Figure 1: S&P 500 Price ActionCurrentHistorical Average%%BeatsHits/MissesBeatsHits/MissesBeats1.5-0.60.7Beats1.7-1.40.9Hits/Misses-0.7-3.9-2.1Hits/Misses-0.3-3.1-2.41.0-1.71.1-1.5Revenue Surprises EPS SurprisesRevenue Surprises EPS SurprisesSource: Standard & Poor’s, Refinitiv, FactSet, UBS Note: Surprised calculated based on revenue beat/miss by +/- 0.25%, earnings beat/miss by +/- 1%. Price performance -1 to +1 daysThis report has been prepared by UBS Securities LLC. ANALYST CERTIFICATION AND REQUIRED DISCLOSURES, including information on the Quantitative Research Review published by UBS, begin on page 13. UBS does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.Equity StrategyAmericasJonathan GolubStrategist jonathan.golub@ubs.com +1-212-713 8673Patrick PalfreyStrategist patrick.palfrey@ubs.com +1-212-713-2000Will JacksonAssociate Strategist will.jackson@ubs.com +1-212-713-2000Nicholas SamoyednyAssociate Strategist nicholas.samoyedny@ubs.com +1-212-713-2000 US Equity Strategy 15 February 2024ab 2US Equity StrategyUBS ResearchS&P 500 Figure 2: 4Q23 Earnings Dashboard – S&P 500Weighted Growth YoY (%)RevenueMarginsEarningsBuybacksEPSS&P 5003.34.67.91.69.5Cyclicals-2.0-7.4-9.42.2-7.2Energy-9.9-15.0-24.93.1-21.7Materials-5.7-14.2-19.90.7-19.2Industrials3.02.65.51.67.1Discretionary ex-Internet Retail1.8-1.8-0.11.71.6TECH+10.128.538.61.740.3Technology7.113.520.70.921.6Internet Retail13.6377.7391.4N.A.423.6Media & Internet16.393.0109.33.0112.3Non-Cyclicals4.3-6.6-2.30.6-1.6Staples2.62.65.10.25.3Health Care7.0-19.2-12.21.4-10.8Utilities-1.622.420.8-2.817.9REITs6.4-3.23.1-3.5-0.3Telecos0.9-8.8-7.90.8-7.2Financials4.54.59.12.011.1Source: Standard & Poor’s, Refinitiv, FactSet, UBS Note:...
