Global Markets Strategy20 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 78% of S&P 500 companies having reported, 73% are beating 4Q earnings (vs. 71% avg. last 4Qs, see Figure) and 63% are beating revenue estimates (vs. 64%). Notable standouts in terms of earnings beats so far this quarter include Staples, Healthcare and Industrials: •Staples. With 66% of Staples companies having reported, 84% are beating 4Q earnings (vs. 75% avg. last 4Qs) and 44% are beating revenue estimates (vs. 62%). •Technology. With 73% of Technology companies having reported, 83% are beating 4Q earnings (vs. 88% avg. last 4Qs) and 70% are beating revenue estimates (vs. 75%). •Industrials. With 88% of Industrials companies having reported, 78% are beating 4Q earnings (vs. 77% avg. last 4Qs) and 71% are beating revenue estimates (vs. 68%). Surprise/Growth. S&P 500 companies so far have surprised on net income by 5.3% (vs. 2.9% last 4Qs, ex-Financials at 6.4%). Earnings surprise (% contribution) was largely driven by Technology (23%), Discretionary (21%) and Industrials (18%). For companies that have reported, 4Q revenue growth is 3.5% y/y and net income growth is 6.1% (vs. 6.4% ex-Financials). EPS Revisions. Since the beginning of the earnings season (i.e., 1/12), 4Q23 EPS have been revised up 5.0% to $56.99 (+7% y/y) with 2023E EPS revised up 1.2% to $221.90 (+2% y/y). Both 1Q24 and 2Q24 have experienced downward revisions of -1.7% and -1.1%, respectively. Looking to 2024, EPS estimates have been revised down -0.3% since the beginning of the earnings season to $242.88 (+9% 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: +1.0%) though misses have been faded far more (-2.3%). So far, Materials (+1.1%) and Communication (+0.8%) 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 Materials (Beat: 3.2%, Miss: -4.4%), Communication (Beat: 3.7%, Miss: -2.2%) and Industrials (Beat: 1.6%, Miss: -4.2%). Week ahead in earnings. A lighter 5-day period ahead for earnings with 12% of S&P 500 companies representing 10% of market cap reporting. Roughly 2% of these companies will be reporting today (2/20) representing 1% o...
