1.Tech Expensive? Double Digits Earnings Growth and Highest Percentage of Names Exceeding Earnings.
Tech sector stocks: Growth at a reasonable price
The tech sector posted double-digit earnings growth in the last two quarters, and it boasts the highest percentage of firms exceeding earnings expectations in the past four quarters among the 11 Global Industry Classification Standard (GICS) sectors.2
Such strong earnings growth momentum is expected to continue through 2017, evidenced by the rising earnings estimates shown in the chart below. The global economic environment is driving the sector’s growth prospects, as some of the headwinds the sector faced last year have turned into tailwinds. Since the tech sector has more foreign sales exposure than other sectors, it is more likely to benefit from the weaker US dollar and improving global growth we have seen this year.3
Source: Bloomberg Finance L.P., as of 6/27/2017. EPS estimates are based on consensus analyst estimates compiled by FactSet.