Here Come Q3 Earnings; Will the Numbers Matter?
This week brings the first big wave of September quarter earnings reports. But here’s an interesting thought: Will the Street actually care what they show?
Cowen chip analyst John Barton, who today cut estimates on most of the companies he covers, contends that both Q3 results and Q4 guidance will be “close to meaningless” for the group. “Negative is obviously expected and anything better than expectations will be categorized under the label of ‘they just haven’t seen it yet,’” he writes. Even assuming a first-half recession, he says, all of the stocks he covers are trading at below historic trough valuations. On the other hand, he doesn’t expect investors to build substantial positions in the stocks until the point where the Street can estimate the post-holiday inventory overhand, which will take at least until late December.
