Macquarie Research, :: Earnings drivers and dividers- Breaking down the difference

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Microstrategy on MarQuee
Earnings drivers and dividers
Breaking down the difference
 We have examined the differences between the Macquarie analysts’
expectations and those of consensus earnings in Buy and Sell ideas on the
Macquarie MarQuee list.
Earnings growth upside to consensus and the market
 For the MarQuee buy ideas list, our conclusion is that for 2011, Macquarie
analysts expect an average of 16% in earnings growth versus just 8% with
consensus expectations and versus 12% for the MSCI Asia Ex index.
 Using the Earnings Analyser (chart below), we have identified that the key
difference between consensus and Macquarie analyst thinking in 2011 is the
expectations for margins (the black bars). While consensus expectations
suggest the MarQuee stocks will face margin compression similar to the
overall index in 2011, Macquarie analysts are forecasting that the MarQuee
stocks as a group will differentiate themselves and continue to expand
margins in 2011 – contributing an extra 4% to earnings growth.
 For the sell side of the list, the conclusion is almost a mirror – both Macquarie
and consensus expect these stocks to deliver lower growth than the index in
2011. The real differentiation for this group of stocks is 2012, where
consensus is expecting earnings to rebound, but Macquarie analysts project
that earnings growth will continue to remain muted.
Microstrategy bottom-up review supports our choices