Another Jaw-Dropping Chart Shows How Optimistic Wall Street Analysts Are On Profit Margins

Let’s start off with a chart you’ve seen a bunch of times on these pages: It shows the record-high levels of profit margins, and the expectations among analysts that they’ll go even higher.

Click to enlarge.


Photo: GMO LLC

The basic gist is that current bullish assumptions are based on a trend that at least taken at the simplest face value seems unrealistic.

Well, here’s another similarly jaw-dropping margins chart.

It shows the percentage of stocks that are assumed to be able to produce a margin expansion going into 2013.

margins profit

Photo: Morgan Stanley

89% of companies are expected to expand their margins in 2013.

With fiscal and monetary tightening possible, is that remotely possible?

Perhaps not.

See here why corporate profit margins are not the end of the world >

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