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UBS Forecasts 8.4% Year-Over-Year Earnings Growth for Q4 2024
UBS expects a 8.4% year-over-year increase in earnings per share (EPS) for the fourth quarter of 2024, a growth rate lower than in previous quarters but still supported by historical trends of upward revisions. The forecast is based on a predictable pattern of earnings estimates, which start too high, are adjusted lower, and are eventually topped by actual results.
The technology sector is driving earnings growth, with a 20.4% expected increase, while non-tech sectors are expected to see a 2.5% growth. However, there are variations among tech companies, with surges in earnings expected for Nvidia (62%), Amazon (52.6%), and Alphabet (26.1%), while Microsoft and Apple are expected to deliver more moderate growth.
The energy sector is expected to contract by 27.5%, weighed by ongoing challenges. On the other hand, financials are expected to deliver robust growth of 17.8%, largely due to the largest investment banks, such as Bank of America, JPMorgan Chase, and Morgan Stanley.
Interestingly, revisions to Q4 earnings estimates have been less negative than usual, with strength concentrated in tech-related companies, and early reporters have exceeded expectations by 4.3%, slightly below the long-term average.