U.S. Profit Margin Expectations

By Marc Chandler, Global Head of Currency Strategy, Brown Brothers Harriman

This Great Graphic was posted on Business Insider by Sam Ro. In appears to originally come from Goldman Sachs. It captures expectations for US corporate profit-margins.

The chart contrasts the bottom up consensus with Goldman’s top down forecasts. The former calls for a 9.3% increase in net margins,while the latter (Goldman) says 8.7%-8.9%.

Earnings, Goldman argues, are more sensitive to changes in margins than to GDP or sales growth. It argues that a 50 bp shift in margins equals $5 a share.

 

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Marc Chandler

Marc Chandler

Marc Chandler has been covering the global capital markets in one fashion or another for nearly 25 years, working at economic consulting firms and global investment banks. Chandler attended North Central College for undergraduate. He holds masters degrees from Northern Illinois University and University of Pittsburgh in American History and International Political Economy. Currently Chandler teaches at New York University Center for Global Affairss, where he is an associate professor.

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Comments

  1. Margins at an all time high.
    I’ll take the under.
    No mention of companies guiding down eps expectations, maybe you’ve not read that yet?