- Earnings season kicks off on Monday, and Bank of America Merrill Lynch analysts are projecting which sectors will impress investors and which are most likely to stumble.
- US banks and brokerages account for many of next week’s reports and begin reporting earnings on October 15.
- BAML analysts expect the insurance, REIT, and utilities industries to post the biggest earnings wins. They anticipate the energy, aerospace/defence, and basic materials sectors to announce the biggest losses.
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Earnings season is less than a week away, and Bank of America Merrill Lynch analysts are predicting which sectors will sink and which will swim.
Public investment-grade issuers – or companies with strong corporate credit – are expected to report a consensus 4.6% earnings decline year-over-year and revenue growth of 3.3%, BAML analysts wrote. The outlook improves when excluding the more volatile finance and energy sectors, analysts added, with earnings only falling 3.8% and revenues growing 5%.
Here are the three sectors BAML expects to post the greatest year-over-year earnings growth and the three expected to announce the biggest declines.
- Earnings growth: 5.2%
- Sales growth: 5.1%
Real Estate Investment Trusts (REITs)
- Earnings growth: 4.0%
- Sales growth: 1.5%
- Earnings growth: 3.7%
- Sales growth: 2.6%
- Earnings growth: -20.9%
- Sales growth: -2.6%
- Earnings growth: -15.3%
- Sales growth: -0.7%
Aerospace and Defence
- Earnings growth: -10.7%
- Sales growth: 0.8%
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