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Why earnings season might be full of surprises (and shocks)

Consensus earnings estimates are looking stale, opening the door for August’s reporting season to deliver some real shocks. 

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The 21 per cent surge in the share price of fast food store operator Collins Foods in recent days reflects the KFC and Taco Bell operator’s impressive revenue growth for the year ended April 30, and a strong start to its new financial year.

But the extreme share price reaction also reflects the fact that the market didn’t really know what to expect; research from Morgan Stanley shows that earnings estimates for Collins Foods were among the most stale on the market, with consensus not updated for about 149 days.

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James Thomson is senior Chanticleer columnist based in Melbourne. He was the Companies editor and editor of BRW Magazine. Connect with James on Twitter. Email James at j.thomson@afr.com

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    Original URL: https://www.afr.com/chanticleer/why-earnings-season-might-be-full-of-surprises-and-shocks-20230628-p5dk5y