Facinating piece from SocGen’s Cross Asset Research looking at expectations for global earnings in 2012. It is subtitled “Death by a thousand cuts; double digit downgrades for Eurozone and Japan” — so do not expect cheerleading.
• Recent earnings forecasts cut by 4.9% and 6.9% for 2011 and 2012, respectively.
• Severe downgrading of both 2011 and 2012 consensus forecasts, with Japan and the Eurozone seeing double-digit percentage cuts to
next year’s earnings;
• US stands out with only minor cuts to 2012 forecasts.
Note that on an ex-financial basis, US 2012 forecasts have seen just a 2% cut, which SocGen describes as “hardly consistent with a recessionary or low growth outlook.”
So either we will miss a recession in the US, or analysts are too optimistic.
Global Earnings Estimates Analysis: Death by a thousand cuts; double digit downgrades for Eurozone and Japan (PDF)
Societe Generale, December 22, 2011