Your current location is:{Current column} >>Text
Tech sector looks very expensive: Barclays By
{Current column}37251People have watched
IntroductionIn a note Thursday, Barclays analysts cautioned that the tech sector appears very expensive despite ...
In a note Thursday,Huainan foreign exchange collapse Barclays analysts cautioned that the tech sector appears very expensive despite another quarter of better-than-average earnings surprises.
They noted that the reported an EPS surprise of +7.8%, significantly surpassing the pre-pandemic average of 5.24%, with 80% of companies beating consensus estimates, a notable improvement from historical averages.
"Once again, the S&P 500 delivered better than average EPS surprise... coming in at +7.8%, well above the 7-year pre-pandemic average of 5.24%," wrote the bank.
Tech remains a standout, leading with a nearly 90% beat-to-miss ratio, followed by Healthcare and Consumer Staples. However, the performance was not uniform across all sectors, with Energy, Utilities, and Materials frequently missing estimates.
In addition, Big Tech played a crucial role in the S&P 500's overall margin recovery, driving positive operating leverage for the third consecutive quarter.
Barclays stated, "Big Tech remains central to the S&P 500's margin recovery story."
Furthermore, Barclays explains that while the fourth quarter of 2023 saw mixed results for Big Tech—with strong year-over-year EPS growth offset by smaller-than-average EPS beats—the first quarter of 2024 reversed this trend. Although year-over-year growth slowed from +63% in 4Q23 to +56% in 1Q24, the average EPS beat rebounded, particularly boosted by NVDA and GOOGL.
Despite the strong earnings performance, Barclays highlights that most sectors, particularly Tech, are trading at or above full valuations.
"The overall Tech sector looks very expensive relative to both long-term and pre-COVID valuations," Barclays emphasized. However, "Big Tech is trading at a notably smaller premium thanks to very strong implied earnings growth."
Statement: The content of this article does not represent the views of FTI website. The content is for reference only and does not constitute investment suggestions. Investment is risky, so you should be careful in your choice! If it involves content, copyright and other issues, please contact us and we will make adjustments at the first time!Tags:
Related articles
Gold futures survive to close above $2,000; Inflation data, Fed on watch By
{Current column}By Barani Krishnan-- The March U.S. jobs report was neither a pedestal nor wrecker ball for the bull ...
Read moreOil prices rise on massive U.S. inventory draw, Idalia hit in focus By
{Current column}-- Oil prices rose in Asian trade on Wednesday, extending gains from the prior session on signs of a ...
Read moreCase builds for China's banks to cut deposit rates By Reuters
{Current column}By Winni Zhou and Tom WestbrookSHANGHAI/SINGAPORE (Reuters) -China's banks will cut deposit rates so ...
Read more
Popular Articles
- Senate Republicans oppose vote just to raise US debt ceiling, push for other priorities By Reuters
- Consumer prices, Cracker Barrel, Semtech reports: 3 things to watch By
- S&P500 rises as signs of slowing growth, labor market stoke Fed pause optimism By
- ECB chief economist says easing inflation welcome but must continue
- Montenegro run
- 5 big analyst cuts: Block has 'limited upside potential,' per UBS By
Latest articles
-
U.S. stocks head higher after JPMorgan's deal for First Republic By
-
Thai central bank to revise down forecasts for 2023 growth and inflation By Reuters
-
Chrysler parent Stellantis offers 14.5%, 4
-
More Ukrainian drones attack Russia after planes hit on airfield By Reuters
-
Oil retreats amid uncertainty over debt ceiling talks By
-
North Korea marks founding day with parade, diplomatic exchanges By Reuters