Earnings Day Blowups Seen Skyrocketing With Street Flying Blind
- Stale sell-side estimates pose a challenge to valuing stocks
- Investors focus on metrics including liquidity this season
A pedestrian, wearing a protective face mask, stands near a closed Apple store in Milan on March 12.
Photographer: Alberto Bernasconi/BloombergWall Street wise guys have fun mocking a quarterly ritual where analysts always manage to set estimates just a penny shy of the earnings companies report. It’s a record of accuracy they’re going to wish still existed two weeks from now.
Prognosticating in the time of coronavirus is a futile exercise. Try as they may to keep up, analysts have been swamped by the outbreak’s economic implications, making their forecasts little more than guesses. Dozens of companies have already copped to having no idea what the impact will be -- their guidance is no help. As a result, measures of expected volatility on earnings announcement days are double levels in normal seasons.