Major European companies have reported bumper profits over the past two weeks. However, analysts have revised down the company’s earnings estimates more than they raised their earnings estimates, according to strategists at Bank of America. The investment bank said European companies saw adjusted earnings per share (EPS) fall to 0.85 in April, down from 1.12 in March. tend to downgrade shares even though companies report bumper profits if those earnings are unlikely to grow in the future. For example, oil giant Shell last week posted a better-than-expected first-quarter profit of $9.6 billion for the first three months of the year. However, if oil prices continue to fall, as has happened in the past year, future earnings could be at risk of falling from current levels. According to strategists, companies with exposure to emerging markets experienced the most significant increase in revision rates in April. On the other hand, those exposed to the US and Europe saw larger drop. Bank of America’s analysis is in line with earlier predictions by Morgan Stanley. In April, the Wall Street giant said Asia’s economic growth would surpass that of the US and Europe this year due to strong domestic demand in countries in that region. The table below highlights 10 large-cap European stocks with high EPS revisions, according to Bank of America. This ratio is calculated by taking the difference between the number of positive changes and negative changes in EPS over the past month. This difference is divided by the total number of estimates made during that same time period. Luxury goods giants Hermes, Burberry and LVMH rank high on Bank of America’s list. Louis Vuitton’s parent company, Moët & Chandon and Hennessy said in April that they would benefit from China’s post-coronavirus reopening as the return of tourism brings in high spenders. grant. LVMH stock hit a record high following the results and is up nearly 30% this year. Novo Nordisk’s EPS revision rate is also in the positive territory, thanks to the blockbuster weight loss pill Wegovy and other products in development. Historically, luxury goods and pharmaceutical stocks have performed better in times of high inflation because these companies can raise prices more than others. More broadly, Bank of America says Europe-focused investment funds have been struggling lately. They recorded seven straight weeks of outflows through last week – marking the highest level since mid-December. The investment bank added that the portfolios are run by fund managers. pole) executive had a $1.79 billion withdrawal while index tracking funds (passive funds) had a $1.19 billion withdrawal – the first time this year they experienced any such losses. So, according to Bank of America.