Large European companies reported bumper profits over the past two weeks. However, according to strategists at Bank of America, there were more downward than upward revisions of company earnings estimates by analysts. The investment bank said European companies saw a decrease in their earnings per share (EPS) revision ratio to 0.85 in April, down from 1.12 in March. Analysts tend to downgrade stocks despite companies reporting bumper profits if those earnings are unlikely to grow in the future. For example, oil giant Shell last week posted a stronger-than-anticipated first-quarter profit of $9.6 billion for the first three months of the year. However, if oil prices continue to fall, as they have over the past year, future earnings may be at risk of declining from current levels. Companies exposed to emerging markets experienced the most significant increase in revision ratio during April, according to the strategists. On the other hand, those with exposure to the United States and Europe saw larger declines. Bank of America’s analysis aligns with an earlier prediction from Morgan Stanley. The Wall Street giant said in April that Asia’s economic growth would outpace both the U.S. and Europe this year due to strong domestic demand in countries of that region. The below table highlights 10 European large-cap stocks with high EPS revision ratio, according to Bank of America. The ratio is calculated by taking the difference between the number of positive changes and negative changes in EPS over the past month. This difference is divided by the total number of estimates made during that same time period. 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 that 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 following the results and are up nearly 30% this year. The EPS revision ratio for Novo Nordisk was also in positive territory, thanks to its blockbuster 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 Europe-focused equity funds have been struggling 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 funds tracking indexes (passive funds) had $1.19 billion taken out — their first time this year experiencing any such losses overall, according to Bank of America.