JHML - After The Storm: Earnings Estimates Stabilise
Despite increasing fears of a second wave of COVID-19 infections, consensus 2020 earnings forecasts have remained stable over the past 4 weeks. The COVID-19 downgrade cycle appears complete on a global basis, provided widespread second lockdowns can be avoided.
Exhibit 1: Global COVID-19 downgrade cycle complete
Source: Refinitiv, Edison calculations.
We recognise that the transition away from national government COVID-19 employment subsidies might lead to challenging unemployment data during Q4. However, for now, at least, there are no adverse trends in consensus revisions. The new equity market equilibrium in Europe is lower earnings and lower