All articles tagged with #earnings forecasts
Stocks are nearing record highs, driven by strong earnings forecasts and optimism around AI and trade negotiations, but significant uncertainties like trade tensions, economic growth prospects, and Federal Reserve policies pose risks to sustained gains.
French drug giant Sanofi's CEO and head of R&D defended their decision to reduce earnings forecasts for 2024 in order to invest in research studies of new medicines that they believe could generate billions of dollars in annual sales. The company's shares dropped 18% when the cuts were first announced and have yet to fully recover, but the executives are confident in the potential of their pipeline and aim to position Sanofi as the world's leading immunology company.
The recent stumble in the stock market is not only due to rising bond yields but also revisions to S&P 500 earnings forecasts. Wall Street analysts have been lowering their estimates for third and fourth-quarter earnings, erasing previous upside revisions. This shift in sentiment may have played a role in the recent selloff. Many trading algorithms use earnings forecast revisions as an input, and further cuts are expected in the week ahead. Despite the climb in Treasury bond yields, U.S. stocks ended higher on Monday.
Wall Street analysts have raised their profit forecasts for individual companies' quarterly results for the first time in two years, reflecting growing optimism about the economy. Estimates for third-quarter earnings per share rose by 0.4% from June 30 to Aug. 31, and fourth-quarter estimates increased by 0.6% over that period. The Federal Reserve's expectation of a "noticeable slowdown" rather than a recession, along with a positive August jobs report, has contributed to the increased optimism. Executives are also talking less about a recession, with the number of S&P 500 companies mentioning it on earnings calls declining for four straight quarters. However, some analysts remain cautious and have pushed out their recession expectations to next year.
Analysts have significantly upgraded their earnings and revenue estimates for NVIDIA Corporation, with revenue expected to improve by 66% and per-share earnings to shoot up by 221% by 2024. The stock has already risen by 25% to US$389 over the past week, and analysts have increased their price target for NVIDIA by 48% to US$426. The most optimistic analyst has a price target of US$600 per share, while the most pessimistic values it at US$206. The growth outlook for NVIDIA is brighter than the recent past, and the analysts expect NVIDIA to grow faster than the wider industry.