PANews December 15 News, a latest report from Goldman Sachs indicates that investors are currently focused on artificial intelligence and mega-cap technology giants, but the acceleration of the economy in 2026 could bring greater opportunities to cyclical sectors such as industrials, materials, and consumer discretionary. Analysts expect that earnings per share (EPS) growth in these sectors will significantly increase, with the industrial sector's EPS growth potentially jumping from 4% to 15%, real estate companies' EPS growth rising from 5% to 15%, and consumer discretionary companies' EPS growth expected to increase from 3% to 7%. In contrast, the EPS growth for information technology companies may slow from 26% in 2025 to 24% in 2026. Goldman Sachs believes that although cyclical stocks have performed well recently, outperforming defensive stocks for 14 consecutive trading days, the market has not yet fully reflected the potential of the 2026 economic acceleration. Goldman Sachs forecasts that overall U.S. economic growth will accelerate in 2026.

On October 14, Jin10 reported that BlackRock (BLK.N), the world's largest asset management company, attracted $205 billion in client fund inflows in the third quarter of this year, thanks to its continued expansion in private sale credit and alternative assets. According to a statement released on Tuesday, investors net invested $153 billion in stocks, bonds, and other ETFs during the quarter, allowing BlackRock's total ETF size to surpass $5 trillion for the first time. Net inflows into long-term investment funds reached $171 billion, exceeding market expectations of $161 billion. With the market rebound, the total assets under management (AUM) of the company rose to a record $13.5 trillion. The adjusted EPS for the third quarter increased by 1% year-on-year to $11.55, higher than the market expectation of $11.47; revenue increased by 25% year-on-year to $6.5 billion. The inflows also included $34 billion from cash management and money market funds, with this business's asset size surpassing $1 trillion for the first time.

Gate News bot, CMB International published a research report that with the Hong Kong Stablecoin Ordinance coming into effect this year, it is believed that the first batch of companies participating in the HKMA's stablecoin issuer sandbox will become the main beneficiaries of Hong Kong's virtual asset capital flows, and bring opportunities for related companies to increase their performance. On the insurance side, the bank believes that revenue growth from strong medical and motor premiums, as well as improved CoR, will strengthen the profit structure. The bank raised ZA Online's EPS estimates for FY2025-27 to RMB0.69, RMB0.79 and RMB0.93, respectively, and raised its target price to HK$20.4 from HK$16, maintaining a "buy" rating.

Jinhe Industrial's net profit in the first quarter of 2025 is expected to be 2.3-250 million yuan, a year-on-year increase of 78.06%-93.54%, and the net profit after deducting non-profits is 215-235 million yuan, a year-on-year increase of 77.73%-94.27%. It mainly benefits from the stable supply and demand pattern of the food additives market and the optimization and improvement of the company's production technology. EPS is expected to be 0.4-0.44 yuan/share.

On April 14, Jin10 reported that Citigroup stock strategists downgraded their rating on the U.S. stock market, stating that recent events such as DeepSeek, Europe's fiscal stance, and trade tensions have reinforced their view on diversifying investments outside the U.S. market. "From a GDP and EPS perspective, the drivers of the 'exceptionalism' are fading," said Beata Manthey and other strategists at the firm, downgrading the U.S. stock market rating from overweight to neutral. Citigroup stated that the U.S. market remains relatively expensive, and the trend of downward EPS expectations is intensifying.

On March 12, Goldman Sachs lowered its year-end target for the S&P 500 from 6,500 points to 6,200 points, reflecting a 4% decrease in its fair forward price-to-earnings (P/E) valuation from 21.5 times to 20.6 times. At the same time, the index component stocks' earnings per share (EPS) expectations were revised downwards, with 2024 EPS expectations decreasing from $268 to $262 and 2025 expectations dropping from $288 to $280.

The first of the 93,000 cubic meters ultra-large liquid ammonia carrier series built by Jiangnan Shipbuilding, a subsidiary of China State Shipbuilding Corporation, for Eastern Pacific Shipping, has officially started construction. This series consists of 6 vessels, marking the first collaboration between Jiangnan Shipbuilding and EPS, as well as the world's first batch of 93K VLAC orders. These VLACs are currently the world's largest liquid ammonia carriers, with a total length of 230 meters, a beam of 36.6 meters, a molded depth of 22.5 meters, a draft of 13 meters, and classed by Lloyd's Register.

Jinse Finance reported that NVIDIA's revenue in the fourth quarter of fiscal year 2025 was $39.3 billion, a rise of 78% from the same period last year, with data center business revenue reaching $35.6 billion, a rise of 93% from the same period last year; net profit in the fourth quarter was $22.091 billion, a rise of 80% year-on-year. NVIDIA's adjusted EPS for the fourth quarter was $0.89, a rise of 71% year-on-year. NVIDIA's CFO, Claire Kres, revealed that the company delivered $11 billion worth of Blackwell chips in the fourth quarter of fiscal year 2025. NVIDIA's revenue for fiscal year 2025 reached $130.5 billion, a rise of 114% year-on-year. Non-GAAP diluted earnings per share were $2.99, a rise of 130% year-on-year. The company expects a revenue range of $43 billion for the first quarter of fiscal year 2026, with a fluctuation of 2% up or down. The company will support all shareholders registered on March 12, 2025, on April 2, 2025.

Uber's revenue in the last quarter exceeded expectations, reaching $11.96 billion, with a net profit of $6.88 billion and earnings per share of $3.21. The CEO stated that this quarter is the strongest in history. The number of trips increased from 2.6 billion to 3.07 billion, and the total booking amount increased from $37.58 billion to $44.22 billion.

On January 21st, Jinshi Data reported that Borchip Technology rose more than 8%, reaching a new historical high. Ruijie Networks, Oulutong, Xinyisheng, Guangxun Technology, and Taichen Guang all followed the trend and rose. Guojin Securities pointed out that AI is driving the iterative speed of optical modules. The 1.6T optical module will start mass dumping in the fourth quarter of 2024 and officially go into production in the first quarter of 2025. Overseas cloud vendors continue to increase capital expenditure in the AI direction and have clearly stated that capital expenditure will continue to rise in 2025. The growth potential of the optical module zone continues to be prominent, and EPS is expected to continue to increase rapidly.

Jinshi Data News on January 15th, Zhongjin released a research report stating that it maintains a 'outperform industry' rating for 361 Degrees (01361.HK), with unchanged EPS forecasts for 2024/25 of 0.52/0.60 yuan and introduces an EPS forecast for 2026 of 0.68 yuan. Valuation switch to 2025, maintaining a target price of 5.2 Hong Kong dollars. The company announced the operating conditions for 4Q24: 361 Degrees' main brand offline retail sales rose by about 10% year-on-year, 361 Degrees' children's clothing offline retail sales rose by 10-15% year-on-year, and 361 Degrees' e-commerce platform retail sales rose by 30-35% year-on-year.

Xtep International's 4Q24 operating performance is good, with the main brand's retail sales rising by a high single-digit percentage year-on-year, retail discounts at 30-35% off, and Saucony brand's retail sales rising by about 50% year-on-year. CICC maintains its 'outperform industry' rating, considering the company's reduced losses after divesting the Gaisiwei and Paladin brands, raising its 2024 EPS forecast by 4% to 0.46 yuan, and switching valuation to 2025, with a slight 3% increase in the target price to 6.9 Hong Kong dollars.

Jinshi data news on October 30th, Zhongjin released a research report stating that it maintains the "outperforming the industry" rating for MINISO (09896.HK), with EPS forecast for 2024/25 unchanged at 2.15/2.59 yuan; considering the entry of the peak season in the fourth quarter to catalyze the valuation increase, the Hong Kong stock target price is raised by 9% to 44.6 Hong Kong dollars. The bank participated in the 2024 global brand strategy upgrade results release conference held by MINISO, and the newly opened Shanghai MINISO in October.

Jinshi data news on October 28th, Guotai Junan released a research report stating that considering the accelerated expansion of stores under the intensified short-term competitive situation and the pursuit of rise, profit margins may be dragged down, and the net profits of New Oriental (EDU.N) are lowered to 5.19/6.66/8.07 billion U.S. dollars, with EPS of 0.3/0.39/0.48 U.S. dollars. The bank stated that the worry about the month-on-month decline in the growth rate of low-base income is magnified, but the new business has resilience in rise, and with the marginal slowdown of the short-term capacity expansion pace, the profit margin in Q3-4 is expected to gradually recover.

On September 16th, Jin10 Data reported that Goldman Sachs issued a report that lowered Hong Kong Exchanges and Clearing Limited's (00388.HK) earnings per share forecast for 2024 to 2026 by 2%, 4%, and 5% respectively to reflect the Trading Volume in August and since September. The rating is maintained as buy, and the target price is lowered by 4.4% to HKD 306, which is equivalent to a predicted P/E ratio of 35 times for 2025.

Evercore ISI analysts kept their year-end S&P 500 target unchanged at 4,750 points and raised their 2024 EPS forecast for the S&P 500 to $231 from $221. Analysts believe that despite the strength of the economy and the absence of a recession due to two years of sustained monetary policy tightening, US stocks are likely to retreat in the second quarter, citing inflation, while the current price-to-earnings ratio is as high as 23x, leading to historically low return potential, and the broader market has not kept up with the "energy stocks-led rally" momentum. In addition, the analyst explained that the inflation data made investors and some Fed officials begin to doubt the idea that the Fed will cut interest rates three times.

Goldman Sachs issued a report saying that U.S. stocks are optimistic about AI, but there has not yet been a technology bubble or exceeded the peak after the new crown epidemic. The bank believes the market's estimate of long-term growth rose to 11%, above the long-term average of 9%, but still below the 16% during the tech bubble and 13% in late 2021. Among the top 10 TMT stocks, the median EPS growth forecast is 15%, slightly higher than the median S&P 500 forecast of 11%, but still below the 24% during the tech bubble and the 18% in October 2021. The 10 TMTs are trading at a P/E forecast of 28x, which is also lower than the 52x during the tech bubble and the 43x in late 2021. According to the report, investors are concerned that in addition to NVIDIA, they are exploring other stocks that have the potential to benefit from AI, and believe that entering the second phase of the AI trend will involve AI infrastructure, including semiconductors, cloud service supply, equipment, data center REITs, etc., the third phase will involve companies that have improved their business models, including software and information technology, and the fourth phase will involve companies that have improved their production capacity, including software services, business and professional services, etc.

JPMorgan Chase & Co. said earnings and sales in the U.S. significantly outpaced Europe's, which underpinned people's preference for the region. Strategists led by Mislav Matejka wrote that earnings per share in the United States and Europe increased by 13% for the second consecutive quarter after 60% of American companies and a third of European companies reported. In the U.S., EPS beat expectations by 78%, with EPS growing at +5% YoY. In Europe, earnings per share beat expectations by 50%, and the fourth quarter looked to be another weak quarter, with earnings per share falling 8%.

Morgan Stanley analyst Michael Wilson said Intrerest rates will remain the most important determinant of stock index performance in the short term. A team led by Wilson said in a note that as 2024 progresses, they believe the share price will rely more on economic growth outcomes, although Intrerest RateFluctuation is likely to continue to be a driver to watch throughout the year. The consensus estimate for 2023 earnings per share has fallen by 7% over the past three months, while expectations for 2024 have fallen by 18%. After downward revisions over the past few months, we now expect Q4 2023 EPS year-over-year growth to be flat. This downward revision sets a lower threshold for the quarter, which could lead to another mid-single-digit increase in earnings per share. The focus of strategists will be on the magnitude of earnings corrections across sectors in the coming weeks, as this tends to be the best indicator of corporate performance guidance.

Barclays strategists raised their targets for European equities as they expect them to move higher in 2024 as fundamentals support a soft landing for the European economy. Strategists led by Emmanuel Cau raised the target point for the STOXX Europe 600 index to 510 points, which means that the index will rise by 7% from current levels. They see room for further expansion in P/E ratios in Europe, but still expect mid-single-digit EPS growth.

Citigroup strategists said European equities could face vulnerabilities in the near term, as the market is currently positioned to be the most bullish since 2019 and Fluctuation tend to rise when Central Bank start to ease policy. The team led by Beata Manthey said in a note that earnings delivery is likely to be particularly important in 2024 after large fluctuations in the Intrerest Rate market and more aggressive rate cut expectations are factored in. EPS growth in Europe needs to beat pessimistic market expectations. Strategists expect a slowdown in earnings per share in European equities despite the weak economy, but avoid a recession in profits. Strategists will buy the dips based on the recommendations of Citi's Bear Market list, but will not chase the rebound. The Euro Stoxx 600 is expected to rise to a record 510 points by the end of the year. Citi's sector strategy has seen a cyclical/growth bias amid an improved macro risk balance, but strategists have added some defensive measures against expected Fluctuation.

JPMorgan said the MSCI US index's 12-month forward price-to-earnings ratio is higher considering rising levels of real bond yields. While the P/E ratio is positively correlated with EPS momentum, earnings revisions are likely to move lower again. International stock markets continue to look more attractive than the US. Strategists remain overweight the rest of the world, with a focus on Switzerland for defensive allocations.

Among S&P 500 companies, 1.3 times as many companies in the S&P 500 said consensus earnings forecasts were too low as those said they were too high, Bank of America strategists wrote in a note to clients. It is the highest since 2021. BofA pointed to an increase in rolling three-month guidance, led by real estate and industrials. Among the S&P 500 companies that have announced their results, 70% of companies beat earnings per share, 60% beat sales expectations, and 48% beat both expectations. On average, the percentages are 58%/59%/40%, respectively. Second-half earnings per share guidance has been cut just 0.3 percent since June, driven entirely by energy and materials stocks. "The strength of recent macro data and favorable seasonality suggest limited downside risk to EPS in 2023."

Michael Purves, founder and chief executive of Tallbacken Capital Advisors, raised his year-end target for the S&P 500 to 4,300 from 3,650 in anticipation of higher earnings growth. The forecast sees only a slight pullback in this year's rally, meaning the index will end the year around 4% below current levels. Purves raised its 2023 EPS forecast to $218 from $211 and 2024 to $229 from $221. Purves expects the S&P 500's 12-month price-to-earnings ratio to hover at 18.75 times by year-end, down from nearly 20 times now. Large tech companies "look overvalued and more vulnerable". Purves also said inflation is unlikely to fall below the Fed's 2 percent target anytime soon.

Aninda Mitra, head of Asia macro and investment strategy at BNY Mellon, said any outcome of the debt-ceiling debate could lead to fiscal tightening, which has not been fully priced in by markets. No matter which side of the negotiating side dominates, there will be fiscal cuts, which may lead to a broad-based slowdown in the US economy. If nominal GDP growth slows more than the S&P P/E ratio and EPS growth would suggest, then clearly the hit to equity earnings could be even bigger. Asia is not the first to be affected by the US debt ceiling crisis, but if the dollar strengthens, it could have a very negative impact on global risk assets.