Major European companies reported big profits in the last two weeks. According to strategists at Bank of America, however, there were more downward revisions than upward revisions to the company’s earnings estimates from analysts. The investment bank said European companies saw a decline in the revised earnings per share (EPS) ratio to 0.85 in April, down from 1.12 in March. Analysts tend to downgrade stocks despite companies reporting large profits if those earnings are unlikely to grow in the future. For example, the oil giant Shell last week delivered a stronger-than-expected result in the first quarter of 9.6 billion dollars for the first three months of the year. But if oil prices continue to fall, as they have over the past year, future earnings could be at risk of falling from current levels. Companies exposed to emerging markets experienced the most significant increase in the revision rate during April, according to the strategists. On the other hand, those with exposure to the US and Europe saw a greater decline. Bank of America̵[ads1]7;s analysis is consistent with an earlier prediction by Morgan Stanley. The Wall Street giant said in April that Asia’s economic growth would outpace both the United States and Europe this year due to strong domestic demand in countries in that region. The table below highlights 10 European large stocks with high EPS revision ratios, according to Bank of America. The ratio is calculated by taking the difference between the number of positive changes and negative changes in EPS last month. This difference is divided by the total number of estimates made in the same time period. The luxury goods giants Hermes, Burberry and LVMH rank high on Bank of America’s list. The parent company of Louis Vuitton, Moët & Chandon and Hennessy said in April it is set to benefit from China’s Covid reopening as the return of travel brings back high-end spenders. LVMH shares hit a record high after the results and are up almost 30% this year. The EPS revision ratio for Novo Nordisk was also in positive territory, thanks to major weight loss drug Wegovy and others in the pipeline. Historically, luxury goods and pharmaceutical stocks have outperformed during periods of high inflation since these companies can raise prices more than others. More broadly, Bank of America said European-focused mutual funds have struggled recently. They recorded seven consecutive weeks of outflows until last week – marking the highest level since mid-December. The investment bank added that portfolios run by fund managers (active funds) saw outflows of $1.79 billion, while fund-tracking indexes (passive funds) had withdrawn $1.19 billion — their first time this year to experience such losses overall, according to the Bank of America.