FNArena’s Weekly Insights – August 26 2024
August Trends Have Darkened
By Rudi Filapek-Vandyck, Editor
Reporting season is when investors receive a detailed insight into how companies are actually performing. Where is momentum? How strong is it exactly? And where are the weaker points?
But investing is all about the future and thus what is likely to follow next is arguably of much greater importance than what has been up until June 30th.
Consider, for example, that companies including Megaport ((MP1)) and BlueScope Steel ((BSL)) released financials that either met or bettered analysts estimates, but share prices have come under pressure because the outlook proved disappointing.
This is why FNArena thinks a simple statistic of meets/beats/misses on the basis of reported financials remains a flawed methodology.
Thus far this month, most companies meet or beat expectations, which is positive and vindicates the market’s positivism up until this point, but outlook statements and guidances provided have largely been softer-than-anticipated.
The latter is not so positive and has turned into a defining feature in recent days.
Last week, the FNArena Corporate Results Monitor showed a reasonable balance between meets, beats and misses, with a slight bias towards the latter.
On Monday in the final week, the pendulum is notably swinging towards many more disappointments.
