Will the 2021 Earnings Bonanza Really Happen?
Investors are excited about life after Covid-19, but will companies meet their lofty expectations? Bloomberg Opinion columnists offer their takeaways.
Expectations are high for a strong post-Covid corporate rebound. Is it warranted?
Photographer: Brian Killigrew/Bloomberg
Fourth-quarter earnings are just about over, which means investors can officially turn their attention to 2021, a year that has long been synonymous with a return to pre-pandemic life. Investors widely expect the global economy will come roaring back thanks to vaccinations and pent-up demand.
Analysts also have great expectations for profit growth among U.S. businesses as the country makes its way toward defeating the coronavirus. According to Bloomberg Intelligence, analysts expect a whopping 23.2% increase in earnings per share among S&P 500 companies, up from 22.3% at the start of the year. The upward revisions span the first three quarters of this year, a potentially better sign than counting on an explosive rebound several months from now. Average first-half growth expectations jumped to 43% from 29%.