Global Markets Strategy05 February 2024J P M O R G A Nwww.jpmorganmarkets.comContentsGlobal Earnings4S&P 500 Estimates and Revisions5S&P 500 Earnings Calendar8S&P 500 Post-Reporting Performance11Appendix: S&P 500 Company Specific Comments (Cont.)12Equity Macro StrategyDubravko Lakos-Bujas AC(1-212) 622-3601dubravko.lakos-bujas@jpmorgan.comKamal Tamboli(1-212) 622-5794kamal.r.tamboli@jpmorgan.comBhupinder Singh(1-212) 622-9812bhupinder.singh@jpmorgan.comNarendra Singh(1-212) 622-0087narendra.x.singh@jpmorgan.comArun Jain(1-212) 622-9454arun.p.jain@jpmorgan.comJ.P. Morgan Securities LLCBeats/Misses. With 45% of S&P 500 companies having reported, 71% are beating 4Q earnings (vs. 71% avg. last 4Qs, see Figure 1Sales and Earnings Scorecard (based on curent constituents, botom-up agregation):) and 64% are beating revenue estimates (vs. 64%). Notable standouts in terms of earnings beats so far this quarter include Staples, Healthcare and Industrials: •Staples. With 37% of Staples companies having reported, 86% are beating 4Q earnings (vs. 75% avg. last 4Qs) and 43% are beating revenue estimates (vs. 62%). •Healthcare. With 41% of Healthcare companies having reported, 76% are beating 4Q earnings (vs. 79% avg. last 4Qs) and 88% are beating revenue estimates (vs. 73%). •Industrials. With 58% of Industrials companies having reported, 76% are beating 4Q earnings (vs. 77% avg. last 4Qs) and 64% are beating revenue estimates (vs. 68%). Surprise/Growth. S&P 500 companies so far have surprised on earnings by 4.4% (vs. 2.9% last 4Qs, ex-Financials at 5.8%). For companies that have reported, 4Q revenue growth is 3.4% y/y and net income growth is 5.3% (vs. 6.7% ex-Financials). For 4Q23 reporting season, we expect S&P 500 companies to deliver earnings surprise of ~3% (see Report).EPS Revisions. Since the beginning of the earnings season (i.e., 1/12), 4Q23 EPS have been revised up 3.0% to $56.02 (+5% y/y) with 2023E EPS revised up 0.7% to $220.88 (+1% y/y). Looking to 2024, EPS estimates have been revised down -0.4% since the beginning of the earnings season to $242.37 (+10% y/y). Performance. Average price performance relative to the market 1D post-earnings has been -0.1% (median performance flat). Overall, earnings beats have been rewarded (avg excess performance: +0.9%) though misses have been faded far more (-2.5%). So far, Communication (+1.7%) and Materials (+1.5%) have exhibited the best 1D average excess performance for beats + misses. Interestingly, the biggest spread in 1D average excess performance (vs. market) have been within Industrials (Beat: 1.5%, Miss: -5.3%), Discretionary (Beat: 0.8%, Miss: -5.6%) and Staples (Beat: 1.6%, Miss: -4.5%). Week ahead in earnings. A busy 5-day period ahead for earnings with 19% of S&P 500 companies representing 11% of market cap reporting. Roughly 3% of these companies will be reporting today (2/5) representing 2% of market cap including McD...
