Global corporate earnings estimates turned sharply more positive in August, with BofA Global Research reporting that its worldwide Earnings Revision Ratio climbed to 1.35 from 0.99, indicating that analyst upgrades now outnumber downgrades across every major region tracked.
Japan’s revision ratio touched a record high during the month, while Europe climbed to its seventh-highest reading since 1988. The United States, meanwhile, moved close to a five-year peak. BofA noted that when the global ratio has reached similar levels in the past, the MSCI ACWI index has gone on to post an average 12-month return of 10%.
By sector, the upgrade cycle remains concentrated in economically sensitive industries. Tech Hardware and Diversified Financials are nearing record-high revision ratios, and Semiconductors continue to post strong readings. Energy, Materials and Industrials also posted ratios above the 1.0 threshold, signaling more upgrades than downgrades in those sectors. In contrast, Utilities, Telecom and Consumer Staples continued to see estimate cuts outweigh increases.
Within Asia excluding Japan, Thailand stood out as the top performer for the month of August, registering the highest single-month earnings revision ratio in the region at 3.07, alongside the largest month-on-month improvement in its three-month ratio, which rose 0.67 points. On a rolling three-month basis, Thailand’s ratio of 1.93 ranked second in the region, behind only Taiwan’s 2.02. Analyst upgrades in Thailand were led by the Energy, Materials, Banks, Consumer Discretionary and Tech Hardware sectors.
Elsewhere in the region, Japan posted the highest three-month revision ratio among individual Asia Pac ex-Japan comparison countries at 1.61 (with Japan technically outside the “ex-Japan” grouping but included for comparison), followed by Korea at 1.37 and Hong Kong at 0.98. New Zealand recorded the lowest three-month ratio in the region at 0.43. The Asia Pac ex-Japan composite ratio stood at 0.90 over the same three-month period, an improvement from readings of 0.78 in June and 0.90 in July.
