“After reviewing our forecasts for both revenues and earnings, we conclude that the risks lie to the upside, especially for euro area-based companies. Although bottom-up analysts have already increased their 2015 revenue growth forecasts from 2% to 4% since late January, our top-down model suggests a further acceleration is imminent, with 6% likely for 2015 as a whole. The precise profile thereafter will depend on many things, but a flat profile for the euro, by our calculations, would see revenue growth slow to around 5% in 2016,” Barclays analysts commented on Friday.
As for earnings, they suggest Euro Area companies in particular could see them rise by close to 26% this year. Financials are on the pole position, reported EPS growth for Euro Area listed financials is already running at 32%, year-on-year, according to MSCI.
“With the latest ECB bank lending survey (a traditional leading indicator for EPS trends) projecting strong credit demand ahead, we suspect that the recovery in financial sector EPS will be sustained in to 2016,” they pointed out.
