New IR Impact and Edelman Smithfield research polls analysts about ir
Would you like to know exactly what your analysts are thinking? No, I’m not here to tell you about some new sell-side telepathy service – though I’m sure many of our readers would jump at the option and maybe that’s one for Elon Musk’s Neuralink to figure out – but rather some new research that exposes just how analysts think about IR.
First, my colleague Garnet Roach has been looking at data from recent IR Impact research that examines how respondents viewed their relationship with the sell side.
Second, there are new figures from a sell-side analyst perception study carried out by Edelman Smithfield that have fascinating implications for IROs at companies of all sizes.
Edelman Smithfield’s research – which polled analysts covering a whole range of sectors, from consumer goods, energy and utilities, technology and financial institutions during August and September this year – had a few key findings.
Most interesting for me was the fact that analysts view long-term financial targets as crucial to their understanding of companies. They also still see value in long-term guidance, with three years the ideal timeframe (preferred by 64 percent of those polled), with 14 percent opting for a five-year horizon.
I was also intrigued to note that investor days are a critical calendar event for those polled. Some 95 percent of respondents said that these should be held irrespective of the financial macroenvironment, even if there is a great deal of uncertainty – such as you might find in the market today.
‘Our research makes it clear: investor days are no longer optional, they’re essential,’ says Hunter Stenback, managing director, special situations and investor relations at Edelman Smithfield.
‘These forums present a rare opportunity to reset valuation, strengthen credibility and showcase leadership depth. When done right, with a clear strategy and concrete long-term guidance, an investor day can transform how the market perceives a company’s future.’
This echoed what we heard from investors and analysts when we tried to understand what the investment community wants from capital markets days for our recent playbook with Lumi.
For Tyler Mixter, vice president, equity research at Mutual of America, they represent an opportunity for a company to build a bridge between strategy and the numbers. ‘I think at the end of the day, what an investor is trying to do is tie all of that back to the financials,’ he explains, adding that he will often use investor days and accompanying materials as a resource after the fact.
It’s a good reminder for IROs that capital markets days can be a crucial part of that puzzle of working alongside the sell side. We’ve looked recently at how IR teams can help analysts drive more value through their research – and how much it is a two-way street – and these events seem like they could be a critical part of that.
We’ll have more insights to share from the sell side in two more pieces that examine our recent polls in more detail. Part three – which details the sell side’s preferences around IR engagement – and part four – which looks at how analyst forecasts and negative ratings impact relationships with companies – will be published in the coming weeks. As always, keep your eyes firmly on the IR Impact homepage for more updates.
