Lessons from last year show us that expectation management should be viewed not as a defensive exercise, but as a strategic capability
As companies move through 2026, one lesson stands out clearly: delivering strong results is no longer sufficient to protect valuation. Across markets in 2025, share-price volatility was driven less by execution and more by misalignment between investor expectations and management’s forward-looking narrative.
In this environment, the IR function has become a strategic discipline. Beyond communicating performance, IR teams are increasingly responsible for aligning market perception with a company’s long-term value creation path. When that alignment breaks down, even earnings beats can result in sharp corrections, elevated volatility and weakened investor confidence.
What 2025 revealed about market behavior
Throughout 2025, investors consistently prioritized forward-looking signals over reported results. Several companies delivered better-than-expected earnings, only to experience negative share-price reactions as markets reassessed growth visibility, capital allocation or strategic direction.
In the technology sector, cybersecurity group Fortinet exceeded earnings and revenue expectations, yet its shares weakened as investors focused on signs of growth normalization and margin sustainability. Similarly, online education provider Coursera reported results above consensus, but the stock declined sharply amid ongoing concerns around competitive intensity and long-term profitability.
This dynamic was equally visible among some large-cap European issuers. Ferrari provides a particularly instructive example. In 2025, the company delivered strong financial performance and upgraded medium-term targets, yet the stock experienced a significant correction following a capital markets day. The market reaction was driven not by deteriorating fundamentals, but by a perceived moderation in long-term growth assumptions – particularly around electric vehicle penetration. For a company trading at a premium multiple, even a subtle shift in strategic trajectory proved enough to reset valuation expectations.
Throughout 2025, investors consistently prioritized forward-looking signals over reported results
Across these cases, the message was consistent: valuation reflected confidence in the future path of the business, not confirmation of past performance.
Guidance as a stabilizing tool
Against this backdrop, guidance remains one of the most effective mechanisms for anchoring expectations and supporting valuation stability. When thoughtfully calibrated, guidance reduces uncertainty, narrows valuation dispersion and helps investors model future outcomes with greater confidence.
However, the experience of 2025 reinforced the importance of balance. Overly conservative guidance can undermine confidence in strategic ambition, while aggressive commitments increase the risk of future resets. Increasingly, leading companies are moving away from single-point forecasts toward ranges, scenario-based sensitivities and clearly articulated performance drivers.
For companies trading at premium valuations, this approach is particularly important. Investors expect transparency not only on downside risks, but also on the conditions under which upside could materialize.
The role of pre-wiring
One of the most effective, yet still underutilized, expectation-management tools is structured, pre-event engagement. Running perception checks with key shareholders and analysts ahead of major announcements – such as capital markets days, strategic updates or material changes in capital allocation – allows IR teams to identify gaps between internal assumptions and external consensus.
When those gaps are material, early engagement enables management to frame strategic rationale in advance, reducing the risk of surprise-driven sell-offs. In practice, shaping the narrative before publishing the numbers often proves more effective than explaining the numbers after the fact.
Post-event engagement is equally critical. Following guidance adjustments or strategic recalibration, rapid and targeted follow-up helps re-anchor consensus. Last year showed that in volatile markets, silence is frequently interpreted as uncertainty – and uncertainty is quickly priced into valuations.
Market perception studies as an early warning system
Regular market perception studies have become an essential input into modern IR strategy. When conducted consistently, they provide early visibility into how investors interpret long-term strategy, capital allocation and growth assumptions.
Investors expect transparency not only on downside risks, but also on the conditions under which upside could materialize
These insights should inform not only communication planning, but also internal discussions with senior management. Understanding which assumptions investors are embedding into their valuation models allows companies to adjust expectations progressively rather than through abrupt and value-destructive resets.
A framework for 2026
As IR teams look ahead, five practices stand out as critical to effective expectation management:
- Set realistic guidance with defined optionality. Clearly articulate performance drivers and the conditions that could accelerate or slow outcomes
- Communicate investment plans progressively. Significant shifts in capital allocation should be introduced over time, not unveiled abruptly
- Maintain disciplined messaging across channels. Earnings calls, presentations and executive commentary must reinforce a consistent narrative
- Pre-wire major announcements. Engage key stakeholders well ahead of market-moving events to align understanding
- Engage continuously. Credibility built during stable periods provides resilience when strategic adjustments become necessary.
Market behavior in 2025 underscored a structural shift: valuation increasingly reflects confidence in the future path, not just validation of past performance. As companies navigate 2026, expectation management should be viewed not as a defensive exercise, but as a strategic capability.
For IR professionals, the mandate is clear. Success depends not only on accurate disclosure, but on proactive alignment between strategy and market perception – before misalignment is priced in.
Stefano De Caterina is a senior investor relations manager with cross-industry experience spanning Europe, the US, the UAE and Saudi Arabia. He is also the author of IR Intelligence, a LinkedIn newsletter for IR and finance professionals.
