Credit Suisse Sees Rays of Earnings Light in S&P 500 Forecasts

  • Share of companies raising guidance near 12-year high
  • Bank of America finds investors rewarding stocks that do so

For all the fretting about the recession in U.S. corporate profits, second-quarter results are providing at least one reason for optimism, according to Credit Suisse Group AG. It’s the number of companies raising forecasts for coming quarters, a ratio that has jumped toward a 12-year high.

Nearly 90 percent of companies in the S&P 500 Index that have changed previously disclosed expectations for future earnings have raised the target, among those that reported results between June 1 and July 21, according to data compiled by the bank. That’s the highest since 2010 and near the upper end of a range dating back to December 2003, analysts led by Chief U.S. Equity Strategist Lori Calvasina wrote in a report on July 22.

Any letup in the drumbeat of bad news about earnings would be welcomed by investors, who have clung to stocks even as a streak of quarterly declines in profits stretched to the longest since the financial crisis. Analysts predict profits in the benchmark contracted by 4.5 percent in the second quarter, for a fifth straight retreat…

Credit Suisse Sees Rays of Earnings Light in S&P 500 Forecasts

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