February 2021 Result Season: The Wrap

Feature Stories | Mar 05 2021

The February result season saw the average beat-to-miss ratio of forecasts absolutely smashed. Does that make it the best season ever?

-Australia’s spending frenzy
-Ongoing government support and cost cutting
-Many companies still not game to offer guidance

By Greg Peel

With the February result season now complete in 2021, the FNArena Corporate Result Monitor, which has been building throughout the month, is now complete and published in its final form (see attachment).


The table contains ratings and consensus target price changes along with brief summaries of the collective responses from FNArena database brokers for each individual corporate result, and an assessment of “beats” and “misses”. Australian corporate results tend to focus on the profit line, with all its inherent potential for accounting vagaries, tax changes, asset write-downs and other “one-off” impacts. FNArena has focused mostly on underlying earnings results (more in line with Wall Street practice) as a more valuable indicator of whether or not a company has outperformed or underperformed broker expectations. There is also a level of “quality” assessment here rather than simple blind “quantity”.

The Monitor summarises results from 347 major listed companies. By FNArena’s assessment, 164 companies beat expectations and 44 missed expectations, for a percentage ratio of 47/13 or 3.7 beats to misses. The aggregate of all resultant target price changes came in at a net 5.0% gain. In response to results, brokers made 61 ratings upgrades and 43 ratings downgrades.

The first FNArena Corporate Result Monitor was published in the August season of 2013. See table:

Astonishing Results

The record for FNArena’s beat/miss ratio in a season in the seven years of the Monitor’s existence had previously been 1.7, in February 2016. Last August’s season smashed that record with a ratio of 1.9, against the seven-year average of 1.5.

This February’s result season, that ratio hit 3.7.

But then we live in interesting times.

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