A roundup of what The Globe and Mail’s market strategist Scott Barlow is reading today on the Web
BMO bank analyst Sohrab Movahedi summarized the most recent financial results and restated his top picks in the sector,
“Q1 earnings for the ‘Big 6′ wrapped up on March 1 with five out the ‘Big 6′ exceeding consensus expectations (by most at NA and CM). Cash operating net income to common shareholders across the ‘Big 6′ was $14.1 billion in Q1/24 (down 8 per cent from a year ago), reflecting higher credit provisions and negative operating leverage. We made no changes to ratings and moved our estimates generally higher at the ‘Big 5′ (except for TD reflecting elevated ongoing spending on its U.S. AML issues). Our forecasts now contemplate EPS growth in the 7-10-per-cent range in FY25 with CM and RY at the upper end. We are inclined to transition our attention away from credit and capital adequacy towards pre-tax pre-provision earnings growth and ROE over the coming quarters. Our Outperform-rated names remain CM, NA, EQB, and CWB; RY remains top of the pecking order among our Market Performs”
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Goldman Sachs U.S. equity strategist David Kostin has significantly bumped his forecast for 2024 share buybacks,
“S&P 500 repurchases fell 14 per cent in 2023, the second largest annual decline since the Global Financial Crisis. Executed buybacks totaled $815 billion for the full year. A lack of earnings growth, the high cost of capital, and elevated macro uncertainty were the primary reasons for the decline. Declines in Health Care, Info Tech, Financials, and Consumer Staples accounted for nearly 90-per-cent of the drop. Despite stellar earnings growth, repurchases by the Magnificent 7 fell for the first time in five years (down 11 per cent). We forecast S&P 500 companies will repurchase $925 billion in stock in 2024 (13-per-cent year-over-year growth) and $1,075 billion in 2025 (16-per-cent growth). We had previously forecast S&P 500 buybacks would grow 4 per cent in 2024. Earnings growth is the most significant driver of share repurchases at the index level, explaining about half of the year-to-year variation. We recently upgraded our EPS forecasts for 2024 ($241 EPS, 8-per-cent growth) and 2025 ($256, 6-per-cent growth) due to the improving economic growth environment and stronger than previously expected mega-cap tech margins and earnings”
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BofA Securities analysts Dimple Gosai and Kay Hope detailed how women will benefit disproportionately from the imminent wealth transfer from the Boomer generation ,
“Globally speaking… Wealth is still tilting female. About 33 per cent of the world’s wealth was held by women in 2022 (BCG). Global financial wealth was estimated at $255-trillion in 2022, and that excludes the value Bristolof non-financial assets (real estate, art, jewelry, classic cars, wine, etc) of $261-trillion (BCG Global Wealth Report). BCG noted in a 2020 report that women are adding $5-trillion to their wealth every year; women’s wealth was expected to reach $93-trillion by end-2023. While about half of this is in the US, women globally are increasing their financial firepower … Women are set to own 60 per cent of the UK’s wealth by 2025 (from 48% in 2005), and the proportion is expected to continue growing in the coming decade … Women in Asia (ex-Japan) will hold an estimated $27tn by 2026, according to analysis by BCG for Nikkei Asia. This will be $6-trillion more than women in Western Europe. (Women in Asia ex-Japan overtook Western European women on wealth in 2021.)Women in Asia are growing their wealth at a rate of $2-trillion annually. "
The analysts included a number of stocks they expect will benefit from the trend. Names most recognizable to domestic investors include Bristol Myers Squibb, eBay Inc., Hilton Worldwide Holdings, Illumina Inc., Nike Inc., Target Corp. and Wynn Resorts
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Diversion: “100 Years Ago in Photos: A Look Back at 1924″ - The Atlantic
Scott Barlow