Capital Markets / Investor Relations in Two Minutes or Less
Earnings Calls: A Sell Side Perspective
Stop Pressing *1 at 4:15 PM for a 5 PM Earnings Call!
There are three components to a successful earnings call for Sell-Side Equity Analysts:
1. Visibility in Q&A
2. High Quality Financial Guidance
3. Strategic Vision
Real Estate is all about location, location, location.
An earnings call for a Sell-Side Equity Analyst is all about visibility, visibility, visibility, or information, information, information.
The most important component of Sell-Side Equity Analyst participation on a conference call revolves around asking a question during Q&A.
Why?
An analyst wants to ask a question during Q&A to drive visibility with Buy-Side investors.
Therefore, analysts get really upset when they are not allowed to ask a question on the call.
Can the Call Be a Success Without Asking a Question?
Yes. Some do not want to ask a question!
All about high quality management call backs after the earnings call.
Three Key Rules to Management Call Backs:
1. Call Everyone Regardless of Actual Rating
2. Consistent Message Across All Analysts
3. What am I Missing?
Following these rules will make your call a success regardless of getting a Q&A question.
The method was wildly successful for me when I ran Investor Relations for Caesars Entertainment in 2019.
I have used this method everywhere I have run an Investor Relations program and it is insanely successful in terms of controlling the narrative for a public company!
Compromise Solution
An ideal solution to keep everyone happy might revolve around the following:
1. Providing a highly detailed earnings supplement, like most REITs
2. Just do Q&A for your earnings call!
At the end of the day, an earnings call of only questions will be more engaging and value-add for everyone participating!
Secondary Goals of a Conference Call for Sell-Side Analysts
1. Financial Modeling Inputs
2. Strategy for Next Quarter, Year, and Thereafter
Beyond Q&A, analysts need management to provide financial guidance and the key inputs to generate a financial model around that financial guidance.
Additionally, investors need insight into the go-forward strategy for the company.
What Is a Successful Call for a Sell-Side Analyst?
1. Getting a question during Q&A, or provide quality information,
2. Getting the right inputs to build a detailed and accurate financial model, and
3. Getting insight on the company’s go-forward strategy
If management can accomplish these three things, the sell-side research community will remain happy!
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