UBS: Forget About The Euro Drama, Get Ready For US Earnings Growth This Year

We’ve seen months of successively more dire Eurozone headlines. But guess what? The United States is going to do just fine. In a note out this morning, Jonathan Golub’s UBS equity research team raised its 2012 and 2013 EPS targets for the S&P 500 to $105 and $113 respectively. 

According to Golub, we’ve been hearing about Europe forever, but the outlook hasn’t changed meaningfully since February, an expectation of a recession has been baked in for months. 

Photo: UBS/Bloomberg

UBS also believes that recent data point to a moderate expansion in the United States

From the note:

For instance, the Manufacturing and Non-Manufacturing ISM came in at 54.8 and 53.5 in April, respectively. According to ISM, this is consistent with 4.1% GDP growth. Recent trends in retail sales, loan demand, and weekly claims further support this case.

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Photo: UBS/Bloomberg

 A high baseline for growth from Q1, US expansion, and minimal impact from Europe point to a positive year of earnings. 

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