After a tumultuous 2020 for corporate earnings, the Australian equities earning cycle is starting to gather momentum. Consensus earnings upgrades are at all-time highs, providing a platform for the start of a V-shaped recovery for earnings.
The strongest earnings upgrades over the last 6 months have been in Australia (compared to Europe, the UK and the US) and it remains one of the strongest domestic upgrade cycles since 2009-2010.
Inside this note, we show how a sustained earnings upgrade cycle has the potential to underpin further appreciation of the S&P/ASX 200 index, particularly in cyclical stocks where the Wilsons Advisory Australian Equity Focus List is overweight
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John is a leading investment strategist with 20 years experience.