Investors have heightened their expectations for earnings in the second quarter, with most expecting improvements from the first quarter, according to a survey by IR research and advisory firm Corbin Perception.
About 70 percent of investors surveyed say they expect second quarter results to be better than or in line with consensus, Corbin Perception says in its latest Inside the Buy-side report. That’s up from 55 percent who said the same of the first quarter. The survey shows investors expect to see improvement in free cash flow, EPS momentum and organic growth in second quarter reports.
‘After two consecutive quarters of increasingly bearish sentiment, our most recent investor pulse reflects an uptick in optimism despite the market gyrations of the last week and a half,’ says Rebecca Corbin, founder of Corbin Perception, in a note to media. ‘The divergence in global sentiment is noteworthy, as the crisis in Greece has done little to thwart European optimism in general; meanwhile, Asian investors are increasingly wary of China and are evocatively more bearish.’
Globally, investors remain the most bullish on stocks in the US for a third straight quarter, with 34 percent citing the country as the top pick. That figure, however, is down from 48 percent two quarters earlier, Corbin Perception notes.
About 25 percent say Europe is their top pick in the second quarter, up from 21 percent in the third quarter of 2014. The biggest improvement comes with Japan, which is the favorite of 22 percent of investors in the second quarter of this year compared with only 4 percent two quarters earlier. No investors say they are most bullish on China, down from 2 percent two quarters ago.
Corbin Perception also finds that both bullish and bearish sentiment has increased: the proportion of investors calling themselves bullish doubled to 18 percent at the end of the second quarter from 9 percent in the first quarter, while those who call themselves bearish grew to 9 percent from 4 percent.
