Pre-poll AGMs are coming up trumps

AGM season is delivering, according to Macquarie Equities analysts.

AGM season is delivering a positive surprise in terms of share price performance and earnings per share upgrades. Picture: AAP

AGM season is delivering a positive surprise in terms of share price performance and earnings per share upgrades, according to Macquarie Equities analysts.

Of 40 AGMs for stocks covered by Macquarie, 10 have outperformed and just three have underperformed on the day of their meeting.

There have also been 11 upgrades and just two downgrades to 2021 EPS estimates.

Healius, Orora, Baby Bunty, Cochlear and Qantas outperformed on the day of the AGM and saw EPS upgrades.

At the same time, the US ­reporting season is delivering a record level of positive EPS surprise.

“At a market level, expectations may be too conservative given the V-shaped recovery in the cycle,” Macquarie’s Australian equity strategist Matt Brooks said. “Given the strength in the cycle, we could see a rise in Australia’s FY21 and FY22 estimates in the lead-up to February results.

“Australia’s fiscal stimulus is more supportive for earnings than it has been in many years.”

But the US election remains the No 1 issue for the near term, with a Democrat clean sweep still the most likely outcome according to aggregate polls and prediction markets.

“As highlighted last week, we think a Democrat sweep is positive for value, and negative for US exposures,” he said.

“The key pushback is that US polls are wrong, and that Donald Trump can still win.

“If the polls are wrong, growth stocks with high US exposure will be the likely winners, as this may mean less stimulus, but also no corporate tax hike.”