Signals From VARA Pro Q3/2024
This review outlines how more than 100 European blue-chip companies performed during the third quarter of 2024. We analyzed six key areas:
Estimates versus actuals for both top line and bottom line figures (as an indicator of surprises).
Growth expectations for top line and bottom line (12 month forecast vs. trailing twelve months, TTM).
Lastly, we reviewed the TTM index and used this data to update our Estimates Compass.
The performance of our client companies shows a mixed picture, with only 45% surpassing top line expectations, down from 53% previously. However, 63% exceeded bottom line expectations, marking an improvement from Q2.
Despite the continued weak trend in top line growth, which is now in decline for the third consecutive period—often seen during crises—bottom line growth remains positive, although also low. Sales growth has been stagnant since the start of 2023, and while earnings and sales growth seem balanced, expectations have significantly dropped, from 41 to 10, indicating a shift towards more cautious outlooks.
Top Line:
The upward trend has been interrupted. Only 45% of our client companies exceeded expectations, compared to 53% last time.
Bottom Line:
However, 63% of our client companies exceeded bottom-line expectations, which is a notable increase compared to Q2 (54%).
Top Line 12M Forecast / TTM:
Expectations for the top line remain in line with historical averages. However, the current situation is deteriorating for the third consecutive time, which is typically seen only during a crisis.
Bottom Line 12M Forecast / TTM:
Growth expectations and the current situation on the bottom line are also low, but remain positive.
TTM (Index):
Earnings and sales growth appear to be in balance. However, sales growth has remained flat since the beginning of 2023.
Estimates Compass:
The current situation remains weak, but slightly positive. However, expectations have clearly declined, from 41 to 10.
