“Congrats” aren’t in order
Since October 1st, equity analysts have trimmed their estimates of fourth-quarter profits for America’s biggest public companies by some 4%... and, to make matters worse, execs can’t even rely on the congratulatory remarks they’ve become accustomed to from analysts on earnings calls.
Data reported by Bloomberg reveals that analysts have been tight-lipped with their praise so far in Q4, with just 378 utterances of “good quarter”, “great quarter”, “congratulations”, or the more casually ingratiating “congrats”. That’s 29% fewer compliments than were recorded last year, and a whopping 46% fewer than the same period in 2020.
Flattening flattery
Wall Street analysts have long blurted out back-slapping comments before asking questions on earnings conference calls, perhaps to signal how close they are with company management, win their favor, or maybe just to sincerely congratulate them. By 2019, Barron’s had counted more than 14,000 instances of the phrase “great quarter” on US calls — although research found that the most common recipients of analysts’ laudits actually tended to lag behind the market in terms of stock performance.
Related reading: How company execs can't stop talking about AI on investor calls.
