U.S. corporations are more willing than ever to consider buying competitors amid private concerns they risk disappointing shareholders without making splashy deals, according to J.P. Morgan Chase global co-head of mergers and acquisitions Chris Ventresca.
“With every day that goes by, they have a strengthening portfolio and balance sheet,” Ventresca said of companies across sectors in an exclusive interview at J.P. Morgan’s Park Ave. headquarters.
The problem is that embedded in the aging U.S. equities bull market are expectations for continuing high earnings growth, he said. Analysts expect 2018 S&P 500 earnings to rise almost 20 percent from last year, according to FactSet. The ratio of stock prices to earnings, a valuation metric, has been climbing for the S&P 500 for most of the 9-year expansion. Companies began disclosing second-quarter earnings this week.