Small-cap earnings edge narrows as oil prices cloud outlook, Jefferies says in Stock News 31/03/2026 Surging oil prices and a widening earnings growth gap have put the case for small and mid-caps (SMID) over large-caps on shakier ground heading into the first-quarter reporting season, according to Jefferies. The broker’s base case had been that earnings growth would come in better than average across all three size segments and stronger further down the market-cap ladder, a picture that has now shifted. Consensus estimates now put 2026 earnings growth for small-caps at just under 12%, while the large-cap figure has climbed to 15.5% — its highest point of the year. Mid-caps sit at 12.8%, roughly unchanged over the past eight weeks. “With oil prices surging and staying higher for longer than investors expected, the market has moved back to a more concentrated state, with fewer names beating expectations,” strategist Steven DeSanctis said in a note. The war in Iran has added to the uncertainty, though analysts have not yet revised their estimates in response. Revision trends remain relatively stable for now. Both earnings and sales revision ratios are close to 1.0, and for the seventh straight month the rolling three-month figure has held above that level. “The ratios are driven by Energy, but Discretionary has held up, along with the Financials. Ratios have fallen for both Tech and Industrials,” DeSanctis noted. In the Q4 reporting season, small-caps posted earnings growth of roughly 9%, below large-caps’ 13.2%, snapping a one-quarter streak of small-cap outperformance. Beat rates were slightly below the long-run average for both size segments. One notable pattern from the season was that large-cap companies that missed earnings estimates were not meaningfully punished, with excess returns staying positive across all timeframes reviewed, DeSanctis said. Large-cap beats, meanwhile, generated stronger-than-average alpha, with the gap widening over a 20-day window. On sector composition, the strategist said it remains comfortable for now. Financials account for roughly 25–28% of profits in both small and mid-cap segments, with projected growth of 14.8% and 9.5% respectively. Tech, Industrials, and Materials make up an additional third of the earnings pie, while Consumer sectors — most exposed to higher energy costs — represent less than 20% of profits for both groups. The central concern looking ahead is the second half. The Street is penciling in a sharp acceleration in small and mid-cap earnings growth in Q3 and Q4, a pattern DeSanctis notes has failed to materialise in recent years. Source: Investing.com 2026-03-31 hellenicshippingnews... window.___gcfg = {lang: 'en-US'}; (function(w, d, s) { function go(){ var js, fjs = d.getElementsByTagName(s)[0], load = function(url, id) { if (d.getElementById(id)) {return;} js = d.createElement(s); js.src = url; js.id = id; fjs.parentNode.insertBefore(js, fjs); }; load('//connect.facebook.net/en/all.js#xfbml=1', 'fbjssdk'); load('https://apis.google.com/js/plusone.js', 'gplus1js'); load('//platform.twitter.com/widgets.js', 'tweetjs'); } if (w.addEventListener) { w.addEventListener("load", go, false); } else if (w.attachEvent) { w.attachEvent("onload",go); } }(window, document, 'script')); tweet Share