Long-term Financial Targets

When thoughtfully utilized, long-term targets influence key decisions and help shape the trajectory for growth and stability at a company. These targets are not just numbers; they represent a commitment to shareholders, a roadmap to fulfilling the company’s vision, and a benchmark against which The Street can measure progress. They also serve as an internal motivator.

To better understand long-term financial target trends, we analyzed 100 investor days that have occurred in 2023 across market caps and sectors.

Key Findings:

• The majority, 82%, of companies that hosted investor days provided long-term financial targets
• At least 80% of companies across all market cap ranges provided long-term financial targets with small caps the highest at 86%
• Three-year (2025) and four-year (2026) are the most prevalent timeframes, at 20% and 26% respectively
• Most companies provided three long-term financial metrics

• Revenue growth (78%) and operating margins (73%) are the most oft-cited metrics provided, followed by EPS growth (34%), FCF (33%)

Selected Best Practices…

• Introduce targets in a public forum that allows for management voiceover
• Do not over commit by providing too many metrics or ones that are hard to predict
• Provide achievable financial goals and communicate ranges where appropriate
• Outline baseline assumptions and scenario analyses
• In the absence of long-term targets, articulate strategy milestones