Citi analysts told investors in a note Tuesday that the firm believes 2024 profit growth forecasts in the U.S. and Europe are optimistic.
"Analysts' profit growth forecasts for 2023 in the U.S. and Europe appear realistic and in line with Citi top-down expectations," said the analysts. "2024 forecasts, on the other hand, look optimistic considering the macro outlook and our strategists' views."
The analysts explained that bottom-up U.S. profit growth forecasts are negative at -2.0%, with Europe down -5.4%, which is broadly in line with Citi's top-down forecasts.
However, for 2024, they wrote that analysts see earnings rebounding at a higher rate than would be suggested by Citi's strategists/economists.
"For Europe, the top-down mantra is 'lower for longer' which equates to flat growth, yet analysts have profit growth forecast bouncing back to +4.5%. For the U.S., the top-down base case is that earnings will likely grow at around +5%, while analyst aggregate consensus is at +10.6%, with very strong top-line and operating margin growth," they added.