Overall, Wall Street’s strategists are bullish on stocks for 2013 for various reasons.
One reason worth taking a second look at is expanding corporate profit margins, which are already at historic highs.
But the equity analysts and the companies they cover disagree.
Here’s a chart from Goldman’s David Kostin showing the analysts’ forecast for S&P 500 margins next year:
Photo: Goldman Sachs
According to Morgan Stanley’s Adam Parker, more companies than ever believe their margins are going up:
Photo: Morgan Stanley
In a recent note, BMO’s Brian Belski shared ths chart showing a secular uptrend in margins. Deutsche Bank’s David Bianco has also pointed this out before. Both point to lower interest rates and shift in sales toward overseas regions where tax rates are lower.
Photo: BMO Capital Markets
It’s hard to imagine profit margins going much higher from here, but this was an argument that was also made this time a year ago.
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