Marcus Today February 2020 Reporting Guide
Things to watch out for in the reporting season
There have been a number of serious headwinds for corporate Australia, some of which are only just becoming apparent. This week we saw the new vehicle sales coming in far weaker than expected and showing no sign of the trickledown wealth effects of a housing boom. Consumer sentiment has been weak, but this has been offset by a booming housing market at least in terms of price, although listings have been slower to follow.
We can expect to see a number of companies talk of ‘challenging’ times. Whether that is bushfire related, coronavirus related or even consumer confidence related, it is sure to be a theme. Some will use it as an excuse, others will have been disrupted short term and hopefully the business model will re-adjust, and it will prove temporary. These ‘black swan’ events are hard to quantify. It is not that they happen, they always do, its how a company responds that counts.
Some obvious themes:
- The housing rebound
- Consumer confidence under pressure
- Tourism and educational downturns
- Slowing local economy
Companies will be cautious. It will be hard to look beyond the horizon given the uncertainty out there. Expect volatility
to continue and over/underperformance post results to be driven by broker upgrades and downgrades.
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