Europe: Quarterly financial report reviews for October-December 2023
2024-02-21
■ Expected market performance is better than expected, but it is expected that the company's performance will continue to stagnate
■ Unless expectations for economic recovery within Europe and China increase, the upward momentum of the stock market will be difficult to strengthen
The quarterly financial reports of major European companies for October-December 2023 are progressing smoothly. According to data from the London Stock Exchange Group (LSEG) as of the 13th, out of 390 companies in the European Stoxx 600 index that plan to announce quarterly sales, 154 have already announced their financial reports, with 52% of companies reporting sales exceeding market expectations. Based on the released results and market expectations, it is expected that the revenue will decrease by 0.2% compared to the same period last year. This will be the third consecutive quarter of revenue decline after the same April-June quarter (a decrease of 6.0%) and the same July-September quarter (a decrease of 7.6%). Similarly, it is expected that sales from January to March will also decrease by 5.7%, indicating that the downward trend in revenue will continue. In addition, out of 340 companies planning to release quarterly earnings per share (EPS), 143 have already released financial reports, with 53% of companies having EPS exceeding market expectations. Based on the released results and market expectations, it is expected to decrease by 5.5% compared to the same period last year. This is an expansion since early January (a decrease of 4.9%), followed by a continuous decline in profits for the third quarter after the same April-June quarter (a decrease of 5.9%) and the same July-September quarter (a decrease of 11.1%). It is expected that the period from January to March will decrease by 8.4%, indicating that the stagnation of corporate performance will continue.
The EPS growth rate of the same index for the next year is 5.4%, which has remained at a level of 5-6% since early November 2023. However, the actual value has decreased by 2% during the same period, mainly due to the downregulation of sensitive industries such as energy (down 8.8%), materials (down 5.5%), and general consumer goods (down 2.0%). The expected price-to-earnings ratio (PER) of the same index for the next year is 13.0 times, lower than the average since 2018 (14.2 times). Against the backdrop of unclear performance prospects for enterprises, it has not yet emerged from an undervalued area. With the expectation of early interest rate cuts by the European Central Bank (ECB) decreasing, the upward momentum of the stock market can only be strengthened when expectations for economic recovery within and outside Europe and China increase, and the performance prospects of European companies improve.
■ Unless expectations for economic recovery within Europe and China increase, the upward momentum of the stock market will be difficult to strengthen
The quarterly financial reports of major European companies for October-December 2023 are progressing smoothly. According to data from the London Stock Exchange Group (LSEG) as of the 13th, out of 390 companies in the European Stoxx 600 index that plan to announce quarterly sales, 154 have already announced their financial reports, with 52% of companies reporting sales exceeding market expectations. Based on the released results and market expectations, it is expected that the revenue will decrease by 0.2% compared to the same period last year. This will be the third consecutive quarter of revenue decline after the same April-June quarter (a decrease of 6.0%) and the same July-September quarter (a decrease of 7.6%). Similarly, it is expected that sales from January to March will also decrease by 5.7%, indicating that the downward trend in revenue will continue. In addition, out of 340 companies planning to release quarterly earnings per share (EPS), 143 have already released financial reports, with 53% of companies having EPS exceeding market expectations. Based on the released results and market expectations, it is expected to decrease by 5.5% compared to the same period last year. This is an expansion since early January (a decrease of 4.9%), followed by a continuous decline in profits for the third quarter after the same April-June quarter (a decrease of 5.9%) and the same July-September quarter (a decrease of 11.1%). It is expected that the period from January to March will decrease by 8.4%, indicating that the stagnation of corporate performance will continue.
The EPS growth rate of the same index for the next year is 5.4%, which has remained at a level of 5-6% since early November 2023. However, the actual value has decreased by 2% during the same period, mainly due to the downregulation of sensitive industries such as energy (down 8.8%), materials (down 5.5%), and general consumer goods (down 2.0%). The expected price-to-earnings ratio (PER) of the same index for the next year is 13.0 times, lower than the average since 2018 (14.2 times). Against the backdrop of unclear performance prospects for enterprises, it has not yet emerged from an undervalued area. With the expectation of early interest rate cuts by the European Central Bank (ECB) decreasing, the upward momentum of the stock market can only be strengthened when expectations for economic recovery within and outside Europe and China increase, and the performance prospects of European companies improve.