Latam Earnings Rebound: JPMorgan's 16% Forecast for 2025

Latin America's earnings landscape is set to rebound in 2025, according to JPMorgan's projections, with a robust 16% growth expected across the region. This optimistic outlook follows a challenging 2024, marked by currency depreciation and inflationary pressures. As we delve into the reasons behind this expected recovery and the potential risks, investors should consider the broader context of global economic trends and geopolitical dynamics.

JPMorgan's analysis highlights several factors contributing to the projected earnings rebound in Latin America. First, the region is expected to benefit from a lessening impact of currency depreciation, which played a significant role in the earnings deterioration witnessed in 2024. Additionally, the region's energy, industrials, financials, tech, healthcare, and telecom sectors are poised for double-digit growth after sharp contractions this year. However, consumer discretionary is expected to be an outlier, with a contraction of 9% in 2025, following a 136% increase this year.



Brazil and Mexico, two major economies in the region, are expected to lead the earnings rebound with growth of about 15% and 14% respectively. This positive outlook is driven by a combination of factors, including the lesser role FX depreciation is expected to play, improved sectoral performance, and a recovery in consumer discretionary spending after a sharp increase in 2024.

However, investors should remain cognizant of potential risks and challenges that could hinder the projected earnings rebound in Latin America. Currency depreciation, oil price volatility, and political instability are all factors that could impact earnings growth in the region. Additionally, investors should consider the broader context of global economic trends and geopolitical dynamics, which may influence Latin America's earnings recovery in 2025.

In conclusion, Latin America's earnings rebound, as projected by JPMorgan, offers an optimistic outlook for the region's companies in 2025. This recovery is underpinned by a variety of factors, including a lessening impact of currency depreciation, improved sectoral performance, and a recovery in consumer discretionary spending. However, investors should remain vigilant to potential risks and maintain a balanced approach to capitalizing on these opportunities in the context of global economic trends and geopolitical dynamics.