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Investor and Issuer Engagement in Uncertain Times - Part 4
07 April 2020
IHS Markit's Perception Analytics team engages in in-depth
discussions with investors and analysts daily. Given recent market
volatility and significant economic uncertainty, IHS Markit will be
speaking to investors and analysts on a regular basis to assess how
the current situation with COVID-19 is impacting their evaluations
of and engagement with corporate issuers. Highlights include:
Surprisingly, many investors and analysts agree that
withdrawing guidance may be the most appropriate move for companies
at this time. "Everyone is cutting guidance at this point,
so that is not the end of the world. Investors know that those
numbers are not accurate. Scrapping guidance is
acceptable."
Unsurprisingly, investors and analysts emphasize that it
is most important for companies to conduct and communicate an
honest assessment of the risk factors facing the business. "In this case, companies should talk about how things
have trended intra-quarter and since the end of the quarter to
provide additional guidance on how things have evolved. Some of the
more proactive management teams are doing scenario analyses by
stress-testing their business models under different
scenarios."
Some investors and analysts note that the market will
ultimately reward companies that demonstrate proactiveness and
conservativism on their Q1 earnings calls. "It is very important for them to be proactive rather
than reactive. If their businesses really are resilient, then
management teams will have the numbers to back that up."
IHS Markit's Perception team will continue to gather real-time
market feedback as the situation unfolds, so please look out for
the next part of this series.
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