Q4'23 Inside The Buy-Side® Earnings Primer®

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What can we learn from 2023 guidance practices as we enter 2024?

To garner insights into the latest trends, we analyzed the guidance practices of the S&P 500.

Key Findings:

  • Practice: Among the S&P 500, a substantial 68% of companies provide some form of quantitative guidance, encompassing Revenue, EPS, EBITDA, Capex, and/or FCF.
  • Cadence: Notably, two-thirds of this cohort issue annual guidance only, while 10% and 23% provide quarterly only or both, respectively.
Chart: S&P 500 Guidance
Chart: S&P 500 Guidance 2023 Cadence by Sector
  • Leading Metrics: Revenue and EPS are the leading guidance metrics provided on both an annual and quarterly basis, while Capex and FCF are the most commonly issued on an annual-only basis. The sectors with the most quarterly-only guidance issuers are Tech and Consumer Discretionary.
  • Evolution of Guidance Spreads: When looking at pre- and post-pandemic guidance setting (2018 – 2023), we confirm that spreads are widening, largely to account for increased uncertainty and smarter expectations management.
  • EPS Guidance: The average annual EPS guidance spread has widened in recent years, escalating from $0.23 in 2018 to a substantial $0.41 in 2023.
  • Revenue Guidance: Average top-line spreads, while also increasing over the same 5-year timeframe, widened 0.3% and have held steady over the past three years.
Chart: S&P 500 Annual EPS Avg. Guidance Spreads, 2018-2023 Progression
Chart: S&P 500 Annual Revenue Avg. Guidance Spreads, 2018-2023 Progression

Corbin Advisors is a strategic consultancy accelerating value realization globally. We engage deeply with our clients to assess, architect, activate, and accelerate value realization, delivering research-based insights and execution excellence through a cultivated and caring team of experts with deep sector and situational experience, a best practice approach, and an outperformance mindset.

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