ab6 February 2024Global Research and Evidence LabUS Equity StrategyEarnings Brief 4Q23: Feb 06The dispersion in recent results has been particularly large. While 4Q revisions are much worse than the long-term trend, 2024 is much stronger.67.2% of the S&P 500's market cap has reported. 4Q expectations are for revenues to grow 3.1% and EPS by 8.1%. Growth among groups varies significantly. The table below blends reported results with consensus estimates for unreported companies:GroupEPS Growth (%)TECH+39.7Financials9.7Non-Cyclical ex Health Care 5.7Industrials & Disc ex Internet Retail1.0Health Care-11.6Energy & Materials-22.2Earnings are beating estimates by 6.8% in aggregate, with 71% of companies topping projections. EPS is on pace for 10.3%, assuming the current aggregate beat rate of 6.8% for the rest of this season.Firms beating on both revenues and EPS are outperforming the market by 1.6% vs. an average of 1.7%, while ones missing on both are underperforming by -4.7% vs. -3.1%.Over the next 5 trading days, 84 companies representing 8.7% of S&P 500’s market cap will report results, including Walt Disney, Uber, CVS Health, PayPal, Pepsi, Coca-Cola, and Airbnb. Figure 1: 4Q23 Growth3.13.46.51.68.1RevenueMarginsEarningsBuybacksEPSSource: Standard & Poor’s, Refinitiv, FactSet, UBS Note: Blend of actuals where available and estimatesThis 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 6 February 2024ab 2US Equity StrategyUBS ResearchS&P 500 Figure 2: 4Q23 Earnings Dashboard – S&P 500Weighted Growth YoY (%)RevenueMarginsEarningsBuybacksEPSS&P 5003.13.46.51.68.1Cyclicals-2.4-9.5-11.92.1-9.7Energy-9.8-15.9-25.73.1-22.6Materials-5.9-15.7-21.60.7-20.9Industrials2.5-0.52.01.43.5Discretionary ex-Internet Retail0.8-5.0-4.21.7-2.6TECH+10.127.938.01.739.7Technology7.112.920.00.920.9Internet Retail13.6375.2388.8N.A.420.8Media & Internet16.293.1109.33.0112.3Non-Cyclicals4.0-7.4-3.40.6-2.8Staples2.61.84.40.24.6Health Care5.4-18.4-13.01.4-11.6Utilities5.413.619.1-2.816.3REITs6.1-3.32.8-3.3-0.6Telecos0.9-8.8-7.90.8-7.2Financials4.73.17.72.09.7Source: Standard & Poor’s, Refinitiv, FactSet, UBS Note: Blend of actuals where available and estimatesFigure 3: 4Q23 Surprise Dashboard – S&P 500...
