DAVID BIANCO: There Are Plenty Of Reasons Why High Corporate Profit Margins Are Sustainable

Unlike many analysts, Deutsche Bank’s David Bianco believes historically high corporate profit margins are sustainable.

“For the past 50 years margins have been very cyclical, but not mean reverting,” he argues.

This is not a new argument of his. However, even as profit margins start to show signs of cracking, Bianco is sticking to his thesis.

Here’s a slide that he frequently shows to clients. His bottom line: effective tax rates are lower, interest costs are lower, foreign profit margins are higher, and foreign sales as a share of total sales is on the rise, Bianco’s argument for high profit margins is also part of his reminder that stocks and GDP are not the same thing.

profit margins

Photo: Deustche Bank

SEE ALSO: David Bianco’s 20 Guiding Principles For Investing In The Stock Market >

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