OneTrust Cookie Consent

Navigation

  • Skip to Content
  • Client Log In
  • Investor relations
  • Sustainability Institute
  • Subscribe
  • Contact us
  • Careers
  • Language
  • Go back to Main Menu
  • Client Log In
  • MSCI ONE
  • MSCI Client Support Site
  • Barra PortfolioManager
  • BarraOne
  • MSCI ESG Manager
  • MSCI ESG Direct
  • Global Index Lens
  • MSCI Real Assets Analytics Portal
  • RiskManager 3
  • CreditManager
  • RiskManager 4
  • Index Monitor
  • MSCI Datscha
  • MSCI Real Capital Analytics
  • Go back to Main Menu
  • Language
  • English
  • Chinese
Navigation

Navigation Menu

  • Our Clients
    • Go back to Main Menu
    • Our Clients
    • Asset Managers
      • Featured

        Insights on MSCI One
    • Asset Owners
      • Featured

        Institutional Client Designed Indexes (iCDIs)
    • Banks
      • Featured

        Total Portfolio Footprinting
    • Corporates
      • Featured

        ESG Trends to Watch
    • Hedge Funds
      • Featured

        Factor Models
    • Insurance
      • Featured

        Total Portfolio Footprinting
    • Wealth Managers
      • Featured

        Visualizing Investment Data
  • Our Solutions
    • Go back to Main Menu
    • Our Solutions
    • Analytics
      • Go back to Our Solutions
      • Analytics
      • Analytics Overview
      • Crowding Solutions
      • FactorLab
      • Fixed Income Analytics
      • Managed Solutions
      • Multi-asset Class Factor Models
      • Portfolio Management
      • Quantitative Investment Solutions
      • Regulatory Solutions
      • Risk Insights
    • Climate and Net-Zero
      • Go back to Our Solutions
      • Climate and Net-Zero
      • Climate and Net-Zero Overview
      • Biodiversity
      • Featured

        Implied Temperature Rise
      • Climate Indexes
      • Climate Lab Enterprise
      • Featured

        Net-Zero Tracker
      • Real Estate Climate Solutions
    • ESG Investing
      • Go back to Our Solutions
      • ESG Investing
      • ESG Investing Overview
      • Featured

        Trends 2023
      • ESG Fund Ratings and Climate Search Tool
        • Featured

          ESG and Climate Funds in Focus
      • ESG Indexes
        • Featured

          Role of Capital in the Net-Zero Revolution
      • ESG Ratings
        • Featured

          What is ESG
      • Impact Solutions
        • Featured

          Role of Capital in the Net-Zero Revolution
      • Sustainable Finance Solutions
        • Featured

          Role of Capital in the Net-Zero Revolution
    • Factor Investing
      • Go back to Our Solutions
      • Factor Investing
      • Factor Investing Overview
      • Featured

        MSCI Japan Equity Factor Model
      • Equity Factor Models
      • FaCS
      • Factor Indexes
    • Indexes
      • Go back to Our Solutions
      • Indexes
      • Indexes Overview
      • Client-Designed
      • Climate
      • Direct Indexing
      • ESG
      • Factor
      • Fixed Income
      • Market Cap
      • Real Assets
      • Thematic
        • Featured

          Thematic Exposure Standard
      • Resources
        • Go back to Indexes
        • Resources
        • Resources Overview
        • Communications
        • Education
        • Equity Factsheets
        • Index Licensing
        • Methodology
        • Performance
        • Regulation
        • Tools
    • Real Assets
      • Go back to Our Solutions
      • Real Assets
      • Real Assets Overview
      • Featured

        Real Estate Market Size
      • INCANS
      • Index Intel
      • Portfolio Services
      • Property Intel
      • Real Assets Performance Indexes
      • Real Capital Analytics
  • Research & Insights
    • Go back to Main Menu
    • Research & Insights
    • Featured

      Trends 2023
    • Research & Insights
      • Go back to Research & Insights
      • Research & Insights
      • Research & Insights Overview
      • Climate
      • ESG
      • Equities
      • Factor Investing
      • Fixed Income
      • Multi-Asset Class
      • Real Estate
    • Events
      • Go back to Research & Insights
      • Events
      • Events Overview
      • Featured

        Capital for Climate Action Conference
      • On Demand
      • Webinars
  • Technology
    • Go back to Main Menu
    • Technology
    • Data Explorer
    • Developer Community
    • Technology and Data
  • Who We Are
    • Go back to Main Menu
    • Who We Are
    • About Us
      • Featured

        2022 Annual Report
    • Corporate Responsibility
      • Go back to Who We Are
      • Corporate Responsibility
      • Corporate Responsibility Overview
      • Enabling Sustainable Investing
      • Environmental Sustainability
      • Governance Practices
      • Social Practices
      • Sustainability Reports and Policies
    • Diversity, Equity and Inclusion
    • Media Room
    • Our Leadership
      • Featured

        Henry A. Fernandez
    • Recognition
  • Client Log In
  • Investor relations
  • Sustainability Institute
  • Subscribe
  • Contact us
  • Careers
  • Language
  • Go back to Main Menu
  • Client Log In
  • MSCI ONE
  • MSCI Client Support Site
  • Barra PortfolioManager
  • BarraOne
  • MSCI ESG Manager
  • MSCI ESG Direct
  • Global Index Lens
  • MSCI Real Assets Analytics Portal
  • RiskManager 3
  • CreditManager
  • RiskManager 4
  • Index Monitor
  • MSCI Datscha
  • MSCI Real Capital Analytics
  • Go back to Main Menu
  • Language
  • English
  • Chinese

Main Search

Popular searches:
ACWI Research ESG Factor Investment Insights Gallery Asset Owners
Might interest you:
Equity Analysts Get Sentiment-al

Extended Viewer

 

Equity Analysts Get Sentiment-al

 

Abhishek Gupta and Anil Rao
June 30, 2022

Earnings estimates have fallen for U.S. firms recently with a slew of downward revisions,1 possibly indicating that recession fears may be influential. Equity analysts anticipate that U.S. corporate earnings will increase by about 10% this year, which is a sharp departure from last year’s growth spurt (as shown below).

If growth continues to erode, analysts could be faced with trying to identify those firms that can continue to grow despite the difficult environment. They could also be challenged by so-called “growth traps,” which involve companies that were able to grow earnings recently but offered disappointing future guidance.

 

Earnings and ratings

Earnings estimates and ratings have long been valued financial instruments of the stock picker’s toolkit. Our research indicates that firms whose earnings and ratings have been revised upward (bullish analyst sentiment), tended to outperform the broad market. Yet, historically these firms have been rare gems.

We found that certain industry groups, such as telecommunications, real estate and media and entertainment, had a relatively high share of companies where analysts were currently most bullish. To be sure, these industry groups also had a high share of firms that analysts were most bearish on, which may be a ripe opportunity for stock picking.

 

Small, but mighty?

In addition, we found that most of the companies with the highest (and lowest) sentiment were small-cap stocks, highlighting that analysts may expect the rewards (and risks) in the coming year to expand beyond blue chips.

Earnings estimates declined in the US equity market

Forward EPS growth rate is the growth rate between index 12-month backward EPS and the 12-month forward EPS for the MSCI USA IMI Index.

Industries with a wide range in analyst sentiment

We use the analyst sentiment factor from the MSCI Global Equity Factor Trading Model to determine those firms with the most positive or negative sentiment, as of May 31, 2022.


1 Malik, Hamza Fareed. “Snap's profit warning shocked stock investors this week. Morgan Stanley lays down why more are coming that could drive markets 10% lower.” Business Insider, May 29, 2022.


Related Content

Is the Energy Trade Running Out of Energy?

Energy stocks have posted double-digit gains recently as oil and gas prices have climbed steadily since their pandemic lows.

Explore More

Index Options Indicated Negative Market Sentiment

In the face of continued global equity-market volatility, we turn to the listed-options market to gauge the perception of market risk over the coming months for EAFE, emerging markets (EM) and the U.S.

Read More

Value’s Lost Decade

After more than a decade of unattractive performance and “neglect,” value strategies became a favorite in 2021 and remained so in early 2022. We saw a rotation from growth to value, and value investments posted some long-awaited outperformance.

Learn More

msci logo
  • Terms of Use
  • Legal
  • Modern Slavery Statement
  • Privacy notice
  • Index regulation
  • Locations
  • Cookies
  • Use of ISO standards
  • Site map
Subscribe Contact us
© 2023 MSCI Inc. All rights reserved

UtmAnalytics