EQL - How To Invest In Equities When Guidance Disappears
By Frank Caruso and John Fogarty
The COVID-19 shutdown has prompted an unprecedented number of US companies to suspend earnings guidance. Equity investors should focus fundamental research on a wider range of outcomes instead of the overly precise game of predicting short-term estimates - especially during a period of heightened uncertainty.
Companies are withdrawing guidance on a massive scale as the first-quarter earnings season unfolds. By April 29, 141 US companies with market capitalizations greater than $2 billion had suspended guidance (Display), way beyond anything seen in the worst moments of the global financial crisis.