EFTA Document EFTA01367801

22 May 2015 US Equity Insights 10 EPS tracker: Good EPS beats, lots of sales misses; sales down y/y, but margin expansion helped EPS up y/y 487 companies or 98% of S&P EPS reported. Wok beat on EPS with a wtd avg beat of 6.2% (6.7% ex Fin), but only 32% beat on sales with a wtd avg miss of -1.0% (-1.4% ex Fin). The wtd avg EPS beat of 6.2% is better than normal, but the 8.2% cut to 10 EPS before reporting is also the biggest since recession. Btm-up IQ EPS is now S28.78, 2.6% y/y. The 10 EPS growth is on -3.5% sales decline helped by 4.5% y/y margin expansion and 1.5% from share buybacks. Consensus 20 btm-up EPS is trimmed to $28.84 despite better than expected 10 results. Even with normal 3% beat, 2Q EPS will be down slightly to flat from a year ago. Consensus 2015 btm-up EPS rose somewhat last week to $119.92, vs. $132 seen last September. It is still $1.92 higher than our $118 estimate. Our quarterly EPS estimates for 2015 are: $28, $29, $30, $31. Our 2015E S&P 500 EPS of $118 (flat y/y) assumes average 1.05 EUR/USD, 100 DXY, and -$50/bbl WTI in 2015. Spot DXY dollar index is at -95. if the dollar stays where it is now and oil $60-70/bbl, 2015 S&P EPS should be -$121 vs. our current estimate of $118. 10 blended EPS y/y growth is 2.3% for S&P, 10.0% ex Energy, and 8.2% ex Energy and Financials. 10 EPS y/y growth is strongest at Health Care (18.0%), followed by Financials (16.7%), Tech (9.8%), Cons Disc (7.3%), and Industrials (5.6%). All other sectors have low single digit EPS growth or EPS decline. 10 blended sales y/y growth is -3.5% for S&P, 2.0% ex Energy, and 1.9% ex Energy and Financials. Our two OW secular growth sectors Heath Care and Tech have the strongest sales y/y growth again, 10.5% at HC and 5.2% at Tech. All other sectors have low single digit sales growth or sales decline. 10 blended net margin is 10.6%, 11.1% ex Energy, and 10.1% ex Energy and Financials. The y/y margin growth is 4.5%, 6.2%, and 4.7% respectively. Energy net margin fell less than feared. Most of other sectors had margin expansion from a year ago, led by Financials and Health Care. (Figure 25: Summary statistics on IQ 2015 EPS repot ring 1Q16 Soininsnr(Based on reported companies) II Cos reported %of EPS reported S&P 600 98.3% S&P 500 ex. Financials 97.8% S&P 500 ex. Energy 98.2% S&P ex. Tech 98.0% Consumer Discretionary 84.2% Consumer Staples 96.0% Energy 100.0% Financials 100.0% Health Caro 95.8% Industrials 99.4% Information Technology 99.1% Materials 100.0% Telecommunication Services 100.0% Utilities 100.0% Sows MSS Owns'sSink 487 402 446 422 8ot,S$STtiti EPS (% of of cal % beat % miss EPS surprise I%) EPS W./ rid Sales 1% of co's/ %beat % miss Sales surprise 1%1 Sales y/y 1% 80% 27% 8.2% 2.3% 32% 61% -1.0% -3.8% 61% 27% 6.5% -1.1% 33% 53% -1.4% -4 8% 60% 26% 5.2% 10.2% 32% 51% -0.8% 1.8% 59% 27% 6.5% 0.6% 32% 52% -1.1% .4.8% 58% 27% 1.6% 8.5% 35% 51% -2.0% -0.1% 66% 20% 5.4% 3.5% 31% 60% -2.0% 1.6% 56% 37% 27.6% -53.5% 32% 56% -2.2% -35.0% 64% 26% 6.2% 16.7% 29% 40% 2.5% 2.9% 80% 9% 11.0% 19.1% 44% 35% 1.3% 9.5% 54% 35% -1.4% 5.7% 22% 65% -3.2% -2.4% 63% 25% 5.1% 9.3% 34% 45% 0.1% 4.9% 41% 41% 5.6% 2.3% 17% 69% -5.1% -9.4% 67% 17% 6.7% .6.7% 0% 100% -1.0% 2.0% 63% 30% 9.8% 2.3% 47% 63% -0.2% -4.2% Deutsche Bank Securities Inc. Page 11 CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0059414 CONFIDENTIAL SDNY_GM_00205598 EFTA01367801