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Against a backdrop of still-rising rates and stubbornly-resilient economic growth, analyst sentiment on corporate earnings is increasingly bullish, Refinitiv reports.

For both U.S. and European equities, analysts are revising their earnings estimates higher, the firm said.

“We’ve seen a shift in analyst sentiment over the last two weeks,” it reported, with full-year estimates for 2023 being adjusted, “in dramatic fashion.”

In the week ended July 28, Refinitiv tracked 2,444 earnings revisions for S&P 500 companies — 61% of those revisions were to the upside.

“We’ve seen the ‘up’ revision increase sharply over the last two weeks, which may be a sign that we are seeing a bottom in earnings expectations this quarter,” the report noted.

For the third quarter, earnings growth is forecasted to be just 1.1%, it said, with fourth quarter growth expected to lead the way at 9.3%.

Tech giants Meta Platforms and Alphabet Inc. led the upward revisions last week, Refinitiv said.

European companies also saw similar activity, with 1,911 earnings revisions in the past week — 55% of those changes were to the upside.

However, unlike the forecasts for the S&P 500, companies in the European STOXX 600 index are currently expected to face an earnings recession. Analyst estimates for quarterly earnings growth through the first quarter of 2024 are all negative, it said.