IHS Markit Perspectives – Valuation – Part 8

IHS Markit's Perception Analytics team engages in in-depth discussions with investors and analysts daily. Given recent market volatility and significant economic uncertainty, IHS Markit will be speaking to investors and analysts on a regular basis to assess how the current situation with COVID-19 is impacting their evaluations of and engagement with corporate issuers. The eighth topic we collected feedback on is how companies should frame discussions around valuations given the extreme recent levels of market turbulence.

Highlights include:

Many investors believe it is inappropriate in most situations for companies to directly comment on their stock price as it is the job of the market to determine valuations.

"I have always found it tricky when companies speak about their valuations. I think a company's actions are enough to signal its opinion on its share price"

However, many respondents wish to see firms provide guidance and commentary on their operations so the market can make the best assessment of valuation.

"It is the IR team's job to present the strategy and direction of the company in a way that investors can digest and do the work they need to in order to assess the valuation."

Some suggest that valuation volatility provides an opportunity for IR and management to increase engagement with new investors.

"As a company, I would look for investors who have a good idea about my business and will be there to support the stock during drawdowns. Companies are always looking for these types of investors, and it actually becomes more important amidst this volatility."

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IHS Markit's Perception team will continue to gather real-time market feedback as the situation unfolds, so please look out for the next part of this series.

View Part 1, Part 2, Part 3, Part 4, Part 5, Part 6, and Part 7.

IHS Markit provides industry-leading data, software and technology platforms and managed services to tackle some of the most difficult challenges in financial markets. We help our customers better understand complicated markets, reduce risk, operate more efficiently and comply with financial regulation.

S&P Global provides industry-leading data, software and technology platforms and managed services to tackle some of the most difficult challenges in financial markets. We help our customers better understand complicated markets, reduce risk, operate more efficiently and comply with financial regulation.

This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.