- With earnings season set to officially kick off on Tuesday, LPL is out with a list of three things to watch for in company results.
- LPL expects management teams to instill confidence in investors as an economic recovery from COVID-19 is well underway.
- “Mostly better-than-expected economic data during the quarter is a positive indication of earnings surprises,” LPL noted.
- Here’s what to watch for in the upcoming third quarter earnings season, according to LPL.
- Visit Business Insider’s homepage for more stories.
Investors will have a lot to digest over the coming weeks as third quarter earnings season kicks off amid an ongoing economic recovery from the COVID-19 pandemic.
According to FactSet, consensus estimates call for a 20% year-over-year decline in earnings per share, but LPL expects that figure to be “quite a bit better,” according to a note on Monday.
Over the past three months, consensus estimates have been improving for third quarter earnings, rising by about 4%, LPL observed.
This represents a “good sign that companies may be able to deliver more than the typical upside,” LPL said, adding that it expects management teams “to instill confidence” in investors that the earnings rebound might materialize.
US economic data in recent months is also supportive of this season’s corporate earnings, LPL explained. “Mostly better-than-expected economic data during the quarter is a positive indication of earnings surprises,” LPL said.
Here are three things to watch out for this earnings season, according to LPL.
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1. The impact of COVID-19
“The increase in analysts’ earnings estimates reflects increased confidence in the outlook, even with