OTS: Börsen-Zeitung / profit consensus on the brink, market commentary by …

Profit consensus on the brink, market commentary by Christopher Kalbhenn

Frankfurt (ots) – The terrible news about human suffering and the

The destruction caused by Russia’s attack in Ukraine appalled them

World. About three weeks into the war, something else begins

else to become clear. The economic consequences of the war and

Sanctions against the aggressor Russia – including very sharp increases

Energy prices, a worsening of supply chain problems and the failure of the

Russian market for many companies – make themselves throughout

World economy and especially in Europe increasingly noticeable. through the

War, according to the OECD, will increase global growth this year by more than one

percentage point lower and inflation down by at least two

increase additional percentage points. The rising prices of metals could

according to the OECD cause problems in many sectors of the economy, such as in the aircraft

and vehicle construction as well as in semiconductor production. The ones through the war

triggered supply shortages for raw materials exacerbate the supply disruptions.

Especially Europe and last but not least Germany with its close

economic interlocking with Eastern Europe always get the effects

felt more strongly, as the news of the past few days clearly shows.

For example, the Institute for the World Economy has its forecast for the German

Growth cut from 4% to 2.1% this year: “The war in Ukraine

leads to high raw material prices, new supply bottlenecks and dwindling ones

Sales opportunities.” 60% of the companies, according to the German Industry and

Chamber of Commerce Day, report additional supply chain disruptions from war.

Similarly, the news from important industries. The Association of

chemical industry its forecasts for sales and production increases from 5

% or 2% collected. More than half of the member companies are now expecting

a decline in sales and production. The Association of German Machine and

Plant manufacturing downgraded its output growth forecast for this year to 4% from 7%

% cut.

All of this cannot remain without consequences for the stock markets. the

Market participants will probably have to abandon the idea that the

Profits of listed German companies after last year’s jump

2022 will continue to grow moderately, ie in the high single-digit percentage range.

The Dax is currently appearing after the price slump triggered by the war

a price-to-earnings (P/E) ratio of 12.9 on a

consensus earnings estimates for the year to be relatively cheap.

However, the P/E is based on a consensus estimate for the aggregate

Dax earnings per share, which is still just over 1,100 points and

has practically not changed compared to the beginning of the year. In order to

it is foreseeable that the consequences of the war still have to be incorporated and

the consensus estimate will go down.

Now the index consensus is a sluggish indicator. The many individual stock analysts

who feed it do not adjust their profit forecasts in one fell swoop

push of a button, but first have to recalculate. To make matters worse,

that they are not yet able to properly assess how great the need for adjustment is

will be down. No one knows how long the conflict will last and how big

the economic damage will ultimately fail. After all, Commerzbank has

made a top-down estimate and now assumes that the profits of the

Dax companies not up nearly 7% this year as assumed by consensus

increase, but will decrease by 5%. The first quarter earnings season

which starts in a few weeks will be very exciting. Probably he will

Profit consensus drop noticeably when the numbers work the first traces of

Reveal the consequences of war and the companies adapt their outlook to the new

adjust reality.

However, the decisive factor for the extent of the forecast reductions will be the

further development of the war. In the weeks leading up to the beginning of

A lot can happen in reporting season. In this respect, they will too

Company reports and the falling analyst estimates the stock market

don’t necessarily put them under a lot of pressure. Would there be a compromise between

Ukraine and Russia or a more concrete ceasefire would emerge

the Dax go through the roof even with falling profit forecasts. That’s for sure

only that the stock market will continue to fluctuate heavily in the coming weeks

will show.

Press contact:

Stock exchanges newspaper

editorial staff

Telephone: 069-2732-0

www.boersen-zeitung.de

Further material: http://presseportal.de/pm/30377/5174824

OTS: Börsen-Zeitung

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