Reporting Season Feb '21: Scorecards and insights

About the author:

Tom Sartor
Author name:
By Tom Sartor
Job title:
Senior Analyst
Date posted:
01 March 2021, 2:15 PM
Sectors Covered:
Junior (Emerging) Resources, Bulk Materials

February was a stunning season. Beats strongly overwhelmed misses by a record margin versus recent history. February was broadly a story of cyclicals outperforming overly-fearful valuations similar to August.

Particularly impressive were large-caps stocks and domestic cyclicals as expected (Retail, Financials, traditional Industrials).

But Beats didn’t drive strong price performance, with many of those stocks running into their results.

"Beats" are up 1% and "Misses" are down 13% on average since their results.

Morgans predictions were strong, but again prices broadly moved well in advance of results.

Themes of note

  • Online platforms (cyclical) beating expectations but being sold down
  • Packaging (defensive) all beating and being bid up
  • IT/Software (cyclical) missing and being sold down
  • Mining Services (despite commodities momentum) missing and being heavily sold.

The market is taking notice of valuations. Forward earnings revisions were positive (12mf EPS for XJO likely +4-5%) which they needed to be. Material EPS/EBITDA upgrades outnumbered downgrades by 2:1.

But solid upward revisions didn’t necessarily translate into price performance.


Key themes as we exit reporting season

  1. ongoing cyclical rotation/ reflation
  2. AUD strength
  3. commodities strength
  4. renewed rates volatility & fears of inflationary impacts

Find out more

View our formal Reporting Season Review, which provides further analysis for Morgans clients. Our refreshed Morgans Best Ideas will also be published in the coming days.

If you would like further information, please contact your adviser or nearest Morgans office. 

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Disclaimer: The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents (“Morgans”) do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.

Disclosure of interest: Morgans may from time to time hold an interest in any security referred to in this report and may, as principal or agent, sell such interests. Morgans may previously have acted as manager or co-manager of a public offering of any such securities. Morgans affiliates may provide or have provided banking services or corporate finance to the companies referred to in the report. The knowledge of affiliates concerning such services may not be reflected in this report. Morgans advises that it may earn brokerage, commissions, fees or other benefits and advantages, direct or indirect, in connection with the making of a recommendation or a dealing by a client in these securities. Some or all of Morgans Authorised Representatives may be remunerated wholly or partly by way of commission.

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