Evolving Investor Communications in a COVID-19 Environment
While much has changed since the onset of the COVID-19 crisis when we provided our perspectives on guiding the Street during the pandemic,1 we still find ourselves with a high degree of uncertainty as to how the rest of the year will unfold.
As we enter the second-quarter earnings season, your responsibilities from a capital markets perspective remain to recognize and articulate the challenges at hand; detail your company’s plans to confront them; help your key stakeholders make informed investment decisions, and tailor a thoughtful value proposition in a rapidly changing environment.
These foundational elements set the groundwork for an effective Investor Relations (IR) strategy. However, we find ourselves in a particularly interesting time as the market remains dislocated, yet unlike the first quarter, we anticipate seeing a wider variance in sector and company specific performance. Reporting strong results could lead to overly optimistic views of the rest of the year and future periods. On the other hand, if you report weak results, you may be cast aside as a broken stock. In either case, it is critical to strike the right balance between transparency and credibility.
We have outlined some key recommendations to consider in this earnings cycle.