Q2 Earnings Season Forecast: Misses May Offer Buying Opportunities
By Hal M. Bundrick
NEW YORK (MainStreet)--With the 4th of July holiday over, the earnings reports begin. And while expectations for second quarter earnings season are modest, with disappointing news can come "tremendous buying opportunities of quality names", according to Heather Brilliant, Morningstar global director of equity and credit research.
Thinner profit margins could be the catalyst for disappointing earnings news, especially among stocks with overseas exposure.
"I think that it's a reasonable expectation that record-high profitability cannot continue indefinitely," says Brilliant. "We're a little bit less concerned with businesses that are exposed to the United States and a little bit more concerned with businesses that still have a lot of exposure to Europe, and especially to China. We've been talking about China seeing industrial production come down, and we started to really see that play out. We think companies that are more exposed to that will certainly be affected."
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