Capital Markets Autumn 2020

V

Winners vs. Losers Style Wars

• Analyst estimates suggest Growth fundamentals are far stronger than Value

• Data shows that the spread between economic winners and losers is at historic highs

I

Growth Stocks’ EPS Expected to Outperform

Corporate Sales Dispersion Has Jumped

II

Estimated Long-Term EPS Growth Spread for Russell 1000 Growth Less Russell 1000 Value (bps)

The Rate At Which Sales Are Shifting Between U.S. Companies

1,400

III

7

1,200

Higher Sales Dispersion

6

1,000

5

800

IV

4

600

3

400

2

Lower Sales Dispersion

V

200

1

0

0

2016 2017 2018 2019 2020

2016

2017

2018

2019

2020

VI

Source: Survey of Business Uncertainty conducted by the Federal Reserve Bank of Atlanta, Stanford University, and the University of Chicago Booth School of Business to calculate the Expected Excess Sales Reallocation Rate (left chart) through August 2020; and FactSet data through September 2020 (right chart). Long-term EPS growth represents consensus long-term analyst estimates and actual future EPS growth rates might be materially different than the forecasts shown.

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