Corbin Advisors Finds Investor Sentiment Holding Strong, Fueled by Global Growth; Momentum Expected to Continue into 2018
October 12 2017 - 10:39AM
Business Wire
- 59% of surveyed investors expect
sequential earnings improvement driven by economic growth in U.S.
and Europe, supported by the low interest rate environment
- Majority expect sustained or improved
organic revenue growth this quarter and nearly 60% predict EPS
expansion; outlook for margin acceleration is tempered primarily
due to higher input costs
- 50% believe results will be in line
with consensus estimates while 39% are predicting earnings
beats
- Majority predict the U.S. Fed will
continue to raise rates in 2017 and 92% believe this policy will
continue in 2018
- Management tone remains positive
despite a slip from last quarter’s three-year high; more than 70%
describe executives as bullish or neutral to bullish
- 44% of investors now classify equities
as overvalued, down from 47% last quarter and 67% in March;
notably, nearly half predict valuations will continue to expand
through year-end
- Investors are most bullish on
Financials followed by Technology, while Consumer Discretionary
sees largest uptick in positive sentiment; Utilities and REITs
remain out of favor
- Early indications suggest 2018 is
expected to be another strong year though concerns around
geopolitical volatility and D.C. dysfunction linger; North Korea
worries heighten
- 72% expect Hurricanes Harvey and Irma
to negatively impact 4Q17 U.S. GDP while 62% expect them to have a
positive impact on 2018; just over half predict 2017 U.S. GDP will
expand year-over-year to 2.5%
Click here to access the full report
Corbin Advisors, a specialized investor relations (IR) advisory
firm, today released its quarterly Inside The Buy-side® Earnings
Primer report, which captures trends in institutional investor
sentiment. The survey is based on responses from 70 institutional
investors and sell-side analysts globally, representing over $1.9
trillion in assets under management.
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Expectations remain strong heading into 3Q17 earnings season
driven by an improved economic outlook, supported by the low
interest rate environment. Positive momentum is expected to
continue as the majority believe organic growth, cash flow and EPS
will improve in 2018, though not surprisingly, margin expansion
forecasts are muted given rising input costs.
“I expect earnings to come in better than consensus; the global
economy continues to surprise to the upside. Valuation is the big
conundrum. In a world of low single-digit 10-year yields, what is
the right multiple for the market?” commented Fla Lewis, Chief
Investment Officer at Weybosset Research & Management.
Despite record highs, fewer investors now classify U.S. equity
markets as overvalued and 46% expect valuations to continue to
expand for the remainder of 2017. Buoyed by optimism around growth
prospects, 34% describe themselves as net buyers, up from 25% last
quarter.
“Coming off a strong second quarter, appetite for equities has
not diminished as investors continue to anticipate real global
economic growth and seek returns. While management tone ticked
lower, the slip likely has more to do with expectations management
amid rising sell-side consensus targets and near-term impact of
natural disasters rather than lack of growth,” commented Rebecca
Corbin, Founder and CEO of Corbin Advisors. “Channel checks reveal
expectations for continued strength in resi and non-resi
construction, a global capex pick-up and greater optimism around
energy prospects. Meanwhile, the majority believe we are in the
mid-to-late stage of the economic cycle, suggesting there is more
room to run in the longest U.S. post-war recovery on record. Any
accomplishments on the U.S. political policy front are likely to
supercharge markets as most contributors anticipate legislative
gridlock as opposed to meaningful reform,” added Ms. Corbin.
The Eurozone remains the top region for economic improvement
over the next six months while favorable outlooks for India and the
U.S. are intact. Sentiment on Brazil is improving somewhat while
views toward China remain muted.
Surveyed investors and analysts are most bullish on Financials,
which also saw the lowest level of bearish sentiment in two years
and both Consumer Discretionary and Consumer Staples saw an uptick
in sentiment. Conversely, views on Utilities and REITs remain
downbeat as investors seek grow their investment opportunities.
Since 2006, Corbin Advisors has tracked investor sentiment on a
quarterly basis. Access Inside The Buy-side® and other
research on real-time investor sentiment, IR best practices and
case studies at CorbinAdvisors.com.
About Corbin Advisors
Corbin Advisors is a specialized investor relations (IR)
advisory firm that partners with C-suite and IR executives to drive
long-term shareholder value. We bring third-party objectivity as
well as deep best practice knowledge and collaborate with our
clients to execute sound, effective investor communication and
engagement strategies. Our comprehensive services include
perception studies, investor targeting and marketing, investor
presentations, investor days, specialized research, and retainer
and event-driven consulting.
Inside the Buy-side®, our industry-leading research publication,
is covered by news affiliates globally and regularly featured on
CNBC.
To learn more about us and our impact, visit
CorbinAdvisors.com.
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Corbin AdvisorsBronwyn Swanson,
203-283-7997bronwyn.swanson@corbinadvisors.com