CEO Profit Skepticism Supports Weak Estimates for Stocks
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Investors who want to know why U.S. equity strategists are the most pessimistic in a decade need look no further than statements by chief executive officers.
For every company predicting in January that earnings will beat analyst estimates, 2.5 are projecting results that fall short, matching the worst ratio since the rally began in March 2009, according to data compiled by Bloomberg. While analysts say Standard & Poor’s 500 Index profits will rise 8.8 percent in 2014, that’s almost the same estimate they generated a year ago for 2013, when earnings ended up increasing at about half that rate, the data show.