Corbin Advisors’ Latest Industrial Sentiment Survey Finds Investor Nervousness Ebbs but Growth Remains a ConcernDeferred tariff talks and frozen interest rates serve to stave off imminent recession concerns, though expectations are for continued growth deceleration
- Majority, or 66%, expect Industrial earnings to be In Line with consensus, with 54% modeling sequential deceleration
- More than half, or 52%, believe the Industrial cycle won’t peak until 2020 or later, a significant increase from 29% QoQ
- Half expect the European economy to Worsen over the next six months and 36% predict the same for China; still, pessimism is notably less pronounced than last quarter
- 37% report Holding Industrial investments, an increase from 22% QoQ; Net Buyers nearly doubled
HARTFORD, Conn. – April 17, 2019 – Corbin Advisors, a research and advisory firm specializing in investor relations (IR), today released its quarterly Industrial Sentiment Survey, which finds there is still more gas in the tank as recession fears push out and expectations for 3.5%+ organic growth in 2019 expand. The survey, part of Corbin Advisors’ Inside The Buy-side® publication, is based on responses from 31 institutional investors and sell-side analysts globally who actively follow the Industrial sector.
Our survey reveals investor sentiment has stabilized amid recent deferrals in two leading market pressures – trade discussions and interest rate increases – while survey respondents have also come to terms with a lower growth outlook relative to 2018. To that end, over half expect revenue growth to Worsen this quarter and anticipate earnings will Decrease sequentially, citing concerns with Europe and China. Anders Roslund, Security Analyst at Pareto Securities, notes, “Earnings will come in worse versus last quarter. There is good growth in the U.S. but weakness in Europe.”
With last quarter providing increased certainty, as the majority of public companies gave conservative 2019 outlooks, investor sentiment ticked higher from Neutral to Bearish last quarter to more Neutral.
Weighing on sentiment, half expect the European economy to Worsen over the next six months, while China strength remains a question mark. When asked (unaided) where they are seeing economic weakness, 92% and 67% of respondents cite Europe and China, respectively.
“Our survey this quarter captured a softening in negative sentiment but outright investor optimism is not a prevalent theme. Investors, armed with 2019 guidance outlooks provided last quarter, are gearing for a general slowing growth environment,” commented Rebecca Corbin, Founder and CEO of Corbin Advisors. “The outsized market pressures that caused December’s swoon have been deferred but not resolved. Still, the best Industrial companies thrive in challenging economic times and likely set in motion contingency plans last quarter. We expect some positive surprises this earnings season but also for management teams to stay the course on annual guides given the uncertainty ahead. In light of expectations for slowing revenue growth, margins are in focus, and we believe a leading topic will be inventory levels and the implications on future under-absorption on annual guides,” Ms. Corbin added.
In terms of sector bets, Aerospace & Defense remains at the top of the bulls board, while investors are most bearish on Auto. Transportation experienced the largest increase in negative sentiment QoQ.
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 www.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 www.CorbinAdvisors.com.
Bronwyn Swanson, 203-283-7997