Corbin Releases Inside The Buy-side®: 4Q17 Industrial Sentiment Report

January 18, 2018

Corbin Advisors Finds Positive Industrial Sentiment Builds as 2018 Expected to be a Year of Strong Growth and Momentum

  • Nearly 95% of industrial investors and analysts surveyed expect 4Q17 industrial earnings to meet or beat consensus; a peak 75% predict sequential improvement following strong results last quarter
  • Continued strength in key performance indicators is anticipated in 2018, with nearly 90% expecting EPS expansion and 78% projecting increased free cash flow generation
  • Financial professionals nearly unanimously expect revenue growth to improve in 2018, a significant increase from 74% last quarter
  • Nearly 75% anticipate global capex and U.S. GDP to improve over the next six months; the Eurozone and U.S. continue to see the strongest optimism
  • 72% believe the industrial cycle is in the Mid-to-Late to Late stage, though fewer than one-third expect industrial earnings to peak in 2018
  • 73% report holding or increasing industrial positions, with more buyers recorded this quarter

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HARTFORD, Conn. – January 18, 2018 – Corbin Advisors, a specialized investor relations (IR) advisory firm, today released its quarterly Industrial Sentiment Survey, which reveals strong 4Q17 results and 2018 performance are expected, driven by continued anticipated improvement in key performance indicators and the most upbeat executive tone and investor sentiment recorded since Survey Inception in June 2015.  The survey, part of Corbin’s Inside The Buy-side® publication, is based on responses from 30 institutional investors and sell-side analysts globally who actively follow the industrial sector.

Optimism carries forward heading into 4Q17 earnings season, as nearly 95% anticipate earnings to be in line with or better than consensus and a peak 75% forecast sequential improvement.  Furthermore, overwhelming continued improvement in key performance indicators is anticipated in 2018, with nearly 90% expecting EPS expansion and 78% projecting increased free cash flow generation, while investors nearly unanimously expect revenue growth to improve.  Additionally, management is described as increasingly more positive with over 90% of survey respondents characterizing executive tone as Neutral to Bullish or outright Bullish.  While tax reform is perceived to have largely been priced in, it is expected to continue to be a positive catalyst for the markets.

Regarding valuation, 48% now classify industrials as overvalued, an increase from 35% last quarter. Still, while 72% believe we are Mid-to-Late to Late in the industrial cycle, fewer than one-third expect industrial earnings to peak in 2018. Fueling sentiment, U.S. GDP is expected to improve over the next six months, coupled with increasing bullishness toward Oil & Gas and global capex spending.

“Despite valuation concerns heading into 2018, investors have an increasingly favorable view toward industrials and expect global economic growth to continue to gain momentum,” said Rebecca Corbin, Founder and CEO of Corbin Advisors. Ms. Corbin added, “Bearish sentiment has largely ebbed as investors see a strong industrial backdrop globally and now expect organic growth in the 4.0% - 5.0% range.  Also of interest, 88% reveal Republican policy initiatives are important to continued economic growth despite lingering concerns on the geopolitical environment and D.C. dysfunction.”

Surveyed financial professionals are most bullish on Machinery, Materials and Chemicals, which saw significant gains in positive sentiment, while Distribution saw the most notable increase.  Conversely, Auto continues to garner the lion’s share of bearish sentiment.  Notably, nearly all sectors outside of Auto saw bearish sentiment recede.

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.

Contact

Corbin Advisors
Bronwyn Swanson, 203-283-7997
bronwyn.swanson@corbinadvisors.com