By Siddarth S
(Reuters) - After a disappointing 2024, Latin American companies are expected to see earnings rebound around 16% next year, JPMorgan calculations showed, with almost all countries except Colombia set for double-digit growth.
This year, earnings at companies in the region are estimated to have contracted by 24%, JPMorgan analyst Cinthya Mizuguchi said in a note to clients.
"For 2024, LatAm stands as the worst region both in terms of performance but also for year-end earnings outlook," said Mizuguchi in the note published late Wednesday.
"FX depreciation played a large role in this deterioration of expectations, but the outlook for 2025 seems brighter," Mizuguchi added.
Emerging markets have felt the pain of a strong dollar more broadly this year with the greenback having strengthened nearly 5% since the start of the year against a basket of currencies.
On the sector front, Mizuguchi expects double-digit growth for energy, industrials, financials, tech, healthcare and telecom after sharp contractions this year. However, consumer discretionary was expected to be an outlier and in line for a contraction of 9% in 2025, though that comes after a 136% increase this year.
Earnings growth at companies in Brazil and Mexico are estimated to hit about 15% and 14% respectively next year.
On an equity index level, it has been a painful year for Latin America, with the regional MSCI index having stumbled 25% so far this year.
In dollar terms, Brazil's MSCI index and peer Mexico have sunk around 27% so far this year. That compares to a more than 5% gain in the broader MSCI emerging market equity index.