Fra Factset:
How Might “Brexit” Impact S&P 500 Earnings?
The United Kingdom (Britain) will be a focus for the market during the upcoming week, as the country is scheduled to hold a vote on June 23 regarding its membership in the European Union. There are concerns in the market about the potential negative impact on the economy of the United Kingdom should the country decide to leave the European Union.
Given these concerns, how much revenue exposure does the S&P 500 have to the United Kingdom? Which sectors and companies in the index have the highest revenue exposure to the U.K.? According to FactSet Market Aggregates and FactSet Geographic Revenue Exposure data (based on the most recently reported fiscal year data for each company in the index), the aggregate revenue exposure of the S&P 500 to the United Kingdom is 2.9%.
This is the 3rd highest country-level revenue exposure for the index, trailing only the United States (68.8%) and China (4.9%). At the sector level, the Energy (6.4%), Information Technology (4.0%), and Materials (3.7%) sectors have the highest revenue exposures to the United Kingdom. At the company level, 30 companies in the S&P 500 have revenue exposure of more than 10% to the United Kingdom, led by Newmont Mining (64%), Molson Coors Brewing (34%), and PPL Corporation (31%).
It is interesting note that since February 20 (which is the date it was announced that the EU vote would be held on June 23), the companies in the S&P 500 with more revenue exposure to the U.K. have seen higher average and median price increases relative to the index as a whole. For the entire S&P 500 index, the average price change for a stock from February 20 through June 16 was +11.3%.
For the companies in the index with more than 10% revenue exposure to the United Kingdom, the average price change for a stock over this period was +16.7%. For the entire S&P 500 index, the median price change for a stock from February 20 through June 16 was +9.6%. For the companies in the index with more than 10% revenue exposure to the United Kingdom, the median price change for a stock over this period was +14.3%
