While electric appliances is the effective leader in earnings growth this fiscal year, air transportation and pharmaceuticals are expected to rank among the leaders next fiscal year. Against reports of weakening momentum in electric appliances and nonferrous metals, the analysis, organised around Shikiho’s sector trends, finds that stock-picking is beginning to shift toward sectors expected to perform well next fiscal year.
This analysis reviews trends in earnings growth for the current and next fiscal years across the 33 sectors of the Tokyo Stock Exchange, based on the “Sector Earnings Trends” page of Shikiho Online. It first presents the 6 sectors expected to achieve the highest earnings growth this fiscal year, from which electric appliances can be identified as the effective leader. Excluding the small scale of textiles and apparel, it is reasonable to conclude that electric appliances has the highest effective earnings growth rate.
The sectors expected to rank highest for earnings growth next fiscal year are air transportation, electric power and gas, transportation equipment, pharmaceuticals, electric appliances, and pulp and paper, with electric appliances also ranked among the leaders next fiscal year. Based on these trends, the article points to 2 areas of improvement: a return to earnings growth and accelerating improvement. The data is reportedly published on Shikiho’s sector trends page and offers insight into future flows of funds among sectors.