JPMorgan, however, thinks that there might be good reasons to view these assumptions as somewhat optimistic.
In 2005 European profit margins widened by an impressive 12%, more than at any time including 2000, when the figure was “just” 11.6%. This was helped by supportive factors including accelerating top-line growth, restructuring potential, low depreciation rates, low interest rates and a weakening currency. Analysts are expecting an average widening of a further 70 basis points this year for all sectors except energy.
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