Earnings Face Inflation Headwind, Morgan Stanley’s Wilson Says
- Inflation no longer boosting earnings growth, strategists say
- First-quarter earnings season set to bring risks, they write
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The positive effects from inflation on earnings growth for U.S. firms have peaked as rising costs trim their margins and price pressures caused by the Ukraine war hit consumers, according to Morgan Stanley strategists.
“Margin expectations look overly optimistic for the balance of ‘22 given the myriad of cost pressures companies face,” the strategists led by Michael Wilson wrote in a note published today. Meanwhile, the Ukraine conflict “has led to a spike in energy and food costs which serve as nothing more than a tax on a consumer that is already struggling with high inflation.”