There was a substantial decline in Q2 earnings but they turned out to be better than expected; their decline being ultimately less pronounced than during the Great Financial Crisis (GFC) of 2008-2009, whereas the current recession is much more severe. This surprising resilience is due in large part to sector aspects. Financial stocks have generally proved more resilient than during the GFC. Furthermore, the Healthcare and Technology sectors have emerged remarkably unscathed. The other side of the coin is that, without these last two sectors, the decline in earnings would have been much more pronounced. Given the revisions made and the achievements in H1, barring a new general lockdown episode, most of the consensus adjustment seems to be behind us. However, the valuation debate - excessive or not - is still far from being resolved. The duration of the crisis will be the key parameter in responding to this question.
Kasper ELMGREEN, Eric MIJOT, Ibra WANE, Tristan PERRIER
As the earnings season comes to a close, the time has come to report back on what we have found. With double-digit earnings growth in all the developed regions and substantial revisions to EPS, the season came out largely as promised. Between now and the end of the year, delivering surprises will be more difficult. Against this backdrop, the eurozone, where the recovery continues and where the bases for making comparisons are favourable, should offer strong opportunities.