Capital Markets Winter 2021

I

More from Margins Road to Recovery

• In our view, earnings have a lot of room to bounce back from their depressed level

I

• EPS growth to be driven by 1) revenue growth 2) margin expansion 3) leverage/other

‒ S&P 500 operating margins historically peak at higher levels from one cycle to the next

II

Corporate Margin Can Potentially Drive Growth for Years

Multiple Drivers of Growth

Actual

Forecast

Revenue Growth Margin Expansion Other

III

18%

High Teens EPS Growth!

17%

16%

6%

IV

15%

14%

6%

13%

12%

V

7%

11%

Components of EPS Growth

S&P 500 Operating Margin

10%

2020-2022 S&P 500 Annual EPS Growth Est

VI

Source: Historical data from FactSet and forecast using Alger estimates based on bottom-up S&P 500 EPS consensus for 2021 and 2022 and Alger estimates thereafter. Earnings per share (EPS) is the portion of a company's earnings or profit allocated to each share of common stock.

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