THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE - Analysis of Estimates for Insights on the Economic Recovery
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THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE Analysis of Estimates for Insights on the Economic Recovery Forecast Engine Industry Impact Study / Issue 3 BDO's Valuation & Business Analytics (VBA) Practice
Table of Contents
03 INTRODUCTION
04 STUDY HIGHLIGHTS
09 DEEPER DIVE TOPICS
Recovery Curves Take Shape
The 2020 Value Divergence
Trend Analysis Insights
Analyst Accuracy
30 IMPLICATIONS FOR THE FINANCE FUNCTION
31 INDUSTRY SPOTLIGHT GUIDE
56 METHODOLOGY OVERVIEW
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 2Introduction
Ten months into the COVID-19 pandemic, the economic recoveries for each of the 24 analyzed industries have begun
to take shape. Hindsight, along with the narrowing of analyst estimates and reduction in Q3 surprises, provide us with
a much clearer picture of the path ahead for each industry.
In the first two issues of our VBA Forecast Engine Industry Impact Study, we assessed the initial damage from the
crisis and analyzed the expected recovery curves by industry to help bring the future picture more into focus.
In this third issue, we revisit the themes from the previous studies and explore the following questions on the
economic recovery:
X Has the disconnect between forecasted fundamentals and equity prices persisted, or are estimates catching up to
the rapidly climbing equity markets?
X Has the accuracy of analyst estimates improved as we turn the page into 2021?
X Now with ten months of hindsight, can we start to make sense of the vast array of recovery curves?
To answer these questions and more our team has utilized our proprietary Forecast Engine to help analyze over
20,000 estimates for 419 public companies spread across 24 industries*. Leveraging data algorithms and dashboard
analytics, we’ve synthesized the estimates by industry.
*A detailed description of the study methodology is included in the Methodology Overview.
*A detailed description of the study methodology is included in the Methodology Overview.
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 3Study Highlights
Is a decisive V-shaped recovery realistic at this point in the economic crisis? Most industries continue to see a long
road to recovery, although there is evidence that expectations, and some actual results, have improved for many
industries over the last three months.
Analyzing the results by industry continues to show stark differences, both in terms of near-term impacts as well as
the timing and extent of recovery. Although a decline in revenues and profits is to be expected for certain industries,
the magnitude of the reductions and long-term impact conveyed by analyst estimates is still severe for more than a
few industries.
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 4PERCENT CHANGE IN 2020 REVENUE FROM FEBRUARY 2020 TO JANUARY 2021
Airlines: -63.7%
Gaming, Hospitality, Leisure: -61.2%
Oil & Gas: -35.0%
Restaurants: -17.5%
Distribution: -16.1%
Manufacturing: -13.8%
Retail - Discretionary & Luxury: -9.2%
Media & Entertainment: -8.0%
Healthcare - Medical Devices: -6.9%
Telecommunications: -5.1%
Asset Management: -4.8%
Construction - Multi Family: -4.3%
Construction - Commercial: -3.7%
Technology - Hardware & Equipment: -3.6%
Banks: -2.2%
Insurance: -1.9%
The table shown here displays the Healthcare - Provider: -1.8%
percentage change in 2020 analyst Technology - Software & Services: -1.7%
forecasted revenue by industry from Healthcare - Life Sciences: -0.9%
February 2020 (“pre-COVID-19”) to
January 2021 (“post-COVID-19”). Healthcare - Payer: 2.0%
Technology - Semiconductors & Products: 2.0%
Construction - Single Family: 2.1%
Retail - Consumer Staples: 4.0%
Source for this and all subsequent graphs:
Retail - Online: 12.9%
Data analyzed from S&P Global’s Capital IQ database.
Source for this and all subsequent graphs: Data analyzed from S&P Global’s Capital IQ database. Retail - Online: 9.6%
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 5PERCENT CHANGE IN 2020 EBIT FROM FEBRUARY 2020 TO JANUARY 2021
Airlines: -274.1%
Gaming, Hospitality, Leisure: -157.5%
Oil & Gas: -85.4%
Retail - Discretionary & Luxury: -40.6%
Restaurants: -40.0%
Banks*: -39.9%
Distribution: -30.6%
Manufacturing: -28.7%
Insurance: -19.6%
Asset Management: -18.2%
Construction - Commercial: -17.9%
Healthcare - Medical Devices: -17.5%
Media & Entertainment: -17.1%
Telecommunications: -15.7%
Technology - Hardware & Equipment: -6.3%
Technology - Software & Services: -1.3%
Due to operating leverage
differences between industries, the Healthcare - Life Sciences: 0.2%
impacts to profitability are even Technology - Semiconductors & Products: 1.5%
more severe and disparate.
Healthcare - Payer: 1.9%
Retail - Consumer Staples: 4.0%
Healthcare - Provider: 4.4%
Construction - Multi Family: 6.0%
Construction - Single Family: 14.3%
*For the Banks industry set we have utilized
Retail - Online: 18.5%
earnings before taxes (EBT) instead of EBIT.
Source for this and all subsequent graphs: Data analyzed from S&P Global’s Capital IQ database. Retail - Online: 9.6%
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 6PERCENT CHANGE IN LONG-TERM REVENUE FROM
FEBRUARY 2020 TO JANUARY 2021
Airlines: -21.8%
Oil & Gas: -20.7%
Gaming, Hospitality, Leisure: -13.6%
Banks: -9.7%
Manufacturing: -8.3%
Retail - Discretionary & Luxury: -7.3%
The second set of tables displays Distribution: -7.2%
the change in forecasted revenue
Restaurants: -4.1%
and EBIT between pre-COVID-19
estimates and post-COVID-19 Telecommunications: -3.9%
estimates for the furthest available Technology - Semiconductors & Products: -3.7%
forecast year* by industry.
Healthcare - Medical Devices: -3.3%
Construction - Commercial: -3.3%
*To determine the furthest available forecast year,
we identified the last year in which substantially Insurance: -3.2%
all of the companies had analyst estimates for the
subject metric. Additionally, to ensure the integrity Healthcare - Provider: -2.5%
of the trend analyses and negate any impact from a
survivorship bias, a company included in the long-term Healthcare - Life Sciences: -2.3%
analysis must have not only had analyst estimates for
the furthest available forecast year, but also all years Technology - Software & Services: -0.8%
in the interim, and for all dates in which the estimates
were pulled (e.g., February 2020, April 2020, etc.). Media & Entertainment: -0.4%
Technology - Hardware & Equipment: -0.2%
Asset Management: 0.6%
Healthcare - Payer: 2.8%
Retail - Consumer Staples: 3.2%
Construction - Multi Family: 9.4%
Retail - Online: 14.9%
Construction - Single Family: 15.6%
Source for this and all subsequent graphs: Data analyzed from S&P Global’s Capital IQ database. Retail - Online: 9.6%
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 7PERCENT CHANGE IN LONG-TERM EBIT FROM FEBRUARY
2020 TO JANUARY 2021
Oil & Gas: -35.0%
Gaming, Hospitality, Leisure: -22.1%
Insurance: -15.7%
Banks: -13.8%
Airlines: -13.1%
Telecommunications: -11.4%
As the analysis indicates, most
Manufacturing: -11.2%
industries have been impacted
by the global disruption. It’s also Distribution: -8.8%
abundantly clear that the short- Technology - Hardware & Equipment: -8.7%
term impacts have, and the long-
Asset Management: -8.6%
term impacts are expected to, vary
considerably by industry. In the Restaurants: -6.6%
following sections, we dive deeper Technology - Semiconductors & Products: -5.2%
to provide additional insights and
Retail - Discretionary & Luxury: -5.1%
foreshadow the potential
path ahead. Healthcare - Medical Devices: -4.9%
Construction - Commercial: -4.4%
Healthcare - Life Sciences: -2.0%
Healthcare - Payer: -1.3%
Media & Entertainment: -0.3%
Healthcare - Provider: -0.2%
Retail - Consumer Staples: 0.4%
Technology - Software & Services: 0.8%
Retail - Online: 25.4%
Construction - Multi Family: 30.7%
Construction - Single Family: 39.5%
Source for this and all subsequent graphs: Data analyzed from S&P Global’s Capital IQ database. Retail - Online: 9.6%
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 8Deeper Dive Topics
MARKET VALUE COMPARISON AND INSIGHTS
As an additional analytical step, we have calculated the change in aggregate
total enterprise value (TEV) for each of the 24 industries from February
2020 to January 2021*.
*For the Banks industry set we have utilized market capitalization instead of enterprise value.
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 9PERCENT CHANGE IN TEV FROM FEBRUARY 2020 TO JANUARY 2021
Oil & Gas: -17.5%
After calculating the change in aggregate TEV
Banks: -8.9% for each of the 24 industries from February
Airlines: -6.2% 2020 to January 2021, we then plotted the
relative TEV change for each industry against
Insurance: -3.7%
relative changes in both 2020 EBIT and long-
Construction - Multi Family: -3.4% term EBIT, as presented on the following
pages. Plots above the line represent industries
Gaming, Hospitality, Leisure: -0.1%
where the TEV performance of the industry
Construction - Single Family: 0.2% was higher/better than the relative decrease
in corresponding EBIT (i.e., relative to other
Healthcare - Provider: 6.0%
industries, market value performed better than
Telecommunications: 6.8% analyst estimates would suggest), whereas
Distribution: 8.7% plots below the line represent industries where
TEV performance was lower/worse than the
Restaurants: 10.4% relative decrease in corresponding EBIT (i.e.,
Construction - Commercial: 11.1% relative to other industries, market value
performed worse than analyst estimates would
Retail - Consumer Staples: 14.4% suggest). Plots close to or on the trend line had
Healthcare - Life Sciences: 14.4% TEV performance consistent with the relative
movement in corresponding EBIT (i.e., relative
Retail - Discretionary
to other industries, market value performed
& Luxury: 17.5%
Asset Management: 17.7% as would be expected based on changes
to estimates).
Healthcare - Payer: 17.9%
Healthcare - Medical
Devices: 19.0% Technology - Software
Media & Entertainment: 26.5% and Services: 32.1%
Technology - Semiconductors Manufacturing: 29.1%
& Products: 43.7%
Retail -
Online: 63.1%
Technology - Hardware &
Equipment: 53.3%
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 102020 EBIT CHANGES VS. TEV PERFORMANCE
Retail - Online
Tech. - Hardware & Equipment
Tech. - Semiconductors & Products
Better Performance
Tech. - Software & Services
Manufacturing
Media & Entertainment
Healthcare - Medical Devices
Healthcare - Payer
Asset Management
TEV PERFORMANCE
Retail - Discretionary & Luxury
Healthcare - Life Sciences
Retail - Consumer Staples
Construction - Commercial
Restaurants
Distribution
Telecommunications
Worse Performance
Healthcare - Provider
Construction - Single Family
Gaming, Hospitality, Leisure
Construction - Multi Family
Insurance
Airlines
Banks
Oil & Gas
More Impacted Less Impacted
2020 EBIT DECREASES
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 112020 LONG-TERM EBIT CHANGES VS. TEV PERFORMANCE
Retail - Online
Tech. - Hardware & Equipment
Tech. - Semiconductors & Products
Better Performance
Tech. - Software & Services
Manufacturing
Media & Entertainment
Healthcare - Medical Devices
Healthcare - Payer
Asset Management
Retail - Discretionary & Luxury
TEV PERFORMANCE
Healthcare - Life Sciences
Retail - Consumer Staples
Construction - Commercial
Restaurants
Distribution
Telecommunications
Worse Performance
Healthcare - Provider
Construction - Single Family
Gaming, Hospitality, Leisure
Construction - Multi Family
Insurance
Airlines
Banks
Oil & Gas
More Impacted Less Impacted
LONG-TERM EBIT DECREASES
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 12RECOVERY CURVES TAKE SHAPE
Ten months into the global pandemic multiple patterns for recovery have
emerged. With some hindsight now available, combined with the narrowing
of analyst estimate dispersion in most industries, we see a coalescence
around a handful of specific recovery patterns.
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 13In this section we discuss the recovery curves, and the
following pages highlight those industries which exhibit each
respective recovery pattern:
� “L-Shaped”
A long-term or permanent degradation in future
estimates compared to pre-COVID-19 expectations.
� “U-Shaped” or “Swoosh”
A long-term expected recovery to, or near, pre-
COVID-19 expectations beginning in 2021 or after.
� “V-Shaped”
Evidence of a decisive recovery to, or near, pre-
COVID-19 expectations which occurred or began
prior to 2021.
� “No Impact”
Little or no impact since the onset of COVID-19.
� “Hockey Stick”
An increase or acceleration in actual results and
forecasted results since the onset of COVID-19.
The trend analysis graphs below include the aggregate estimate for the companies in the industry set as of February
2020, January 2021 and in some cases, June 2020. The estimates extend out for each future period in which
meaningful data is available. The aggregate estimates for each year (and at each point in time) are common sized to
the aggregate actual result for 2019. For example, a 2020 estimate of 110% would indicate an expected 10% growth
for the industry set, whereas a 2020 estimate of 90% would indicate a 10% expected decline.
These graphs show a time lapse of the movement in estimates and provide insights for how both the near-term
impact as well as the path toward recovery have changed since the beginning of the economic crisis.
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 14“L-SHAPED” INDUSTRIES
COVID-19 has had a profound effect on eight seemingly diverse industries, which include:
X Telecommunications (see page 55 for Industry Spotlight) X Banks (see page 34 for Industry Spotlight)
X Oil & Gas (see page 47 for Industry Spotlight) X Gaming, Hospitality, Leisure (see page 39 for Industry Spotlight)
X Retail – Discretionary & Luxury (see page 50 for Industry Spotlight) X Distribution (see page 38 for Industry Spotlight)
X Insurance (see page 44 for Industry Spotlight) X Manufacturing (see page 45 for Industry Spotlight)
Despite operating in unrelated markets, each of the industries above shares one key characteristic: each industry has a significant reliance on tangible assets/capital as part
of its value creation strategy. This reliance is evidenced by high book value to market value ratios. While the relative mix of tangible assets versus intangible assets in value
creation for enterprises has long been shifting toward intangibles in the modern economy, the COVID-19 pandemic appears to have accelerated that trend.
TELECOMMUNICATIONS MANUFACTURING DISTRIBUTION
Long-Term EBIT Trend Analysis Long-Term EBIT Trend Analysis Long-Term EBIT Trend Analysis
120% 190% 140%
115% 130%
170%
110% 120%
150%
105% 110%
100% 130% 100%
95% 90%
110%
90% 80%
90%
85% 70%
80% 70% 60%
2019 2020 2021 2022 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023
Feb. 2020 Jan. 2021
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 15“U-SHAPED” / “SWOOSH” INDUSTRIES
Companies in this group are expected to experience a long and slow recovery toward pre-COVID-19 expectations:
X Restaurants (see page 48 for Industry Spotlight) X Asset Management (see page 33 for Industry Spotlight)
X Media & Entertainment (see page 46 for Industry Spotlight) X Construction - Commercial (see page 35 for Industry Spotlight)
X Airlines (see page 32 for Industry Spotlight)
While the early days of the pandemic promised quick recoveries for Restaurants and Airlines, the new reality not only shows a slower top-line recovery but also a prolonged
compression in margins. The latest estimates now show a multi-year recovery for both Restaurants and Airlines.
AIRLINES RESTAURANTS
Long-Term EBIT Trend Analysis Long-Term EBIT Trend Analysis
130%
140%
80%
130%
30% 120%
110%
-20%
100%
-70% 90%
80%
-120%
70%
-170%
60%
2019 2020 2021 2022 2023 2019 2020 2021 2022 2023
Feb. 2020 Jan. 2021
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 16“V-SHAPED” INDUSTRIES
Companies in this group have shown a decisive recovery to, or near, pre-COVID-19 expectations that began prior to 2021:
X Technology – Hardware & Equipment X Healthcare - Provider X Healthcare - Medical Devices
(see page 52 for Industry Spotlight) (see page 40 for Industry Spotlight) (see page 42 for Industry Spotlight)
While a V-shaped recovery was expected, or hoped, for much of the global economy in the early days of the pandemic, only a few industries have shown such a rebound. Two
industries that experienced the expected pause but then picked back up where they left off are Healthcare - Medical Devices and Healthcare - Provider. In fact, despite the
pause, Healthcare - Provider 2020 results are expected to meet pre-COVID-19 expectations.
HEALTHCARE - MEDICAL DEVICES HEALTHCARE - PROVIDER
Long-Term EBIT Trend Analysis Long-Term EBIT Trend Analysis
150% 120%
140%
110%
130%
120% 100%
110%
90%
100%
90% 80%
80%
70%
70%
60% 60%
2019 2020 2021 2022 2023 2019 2020 2021 2022
Feb. 2020 Jun. 2020 Jan. 2021
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 17“NO IMPACT” INDUSTRIES
Companies in this group had little or no impact since the onset of COVID-19:
X Technology - Software & Services (see page 54 for Industry Spotlight) X Healthcare - Life Sciences (see page 41 for Industry Spotlight)
X Technology - Semiconductors & Products (see page 53 for Industry Spotlight) X Healthcare - Payer (see page 43 for Industry Spotlight)
As seen below, Healthcare - Life Sciences and Technology – Software & Services have shown very little variability.
HEALTHCARE - LIFE SCIENCES TECHNOLOGY - SOFTWARE & SERVICES
Long-Term EBIT Trend Analysis Long-Term EBIT Trend Analysis
140% 180%
170%
130%
160%
150%
120%
140%
110% 130%
120%
100%
110%
100%
90%
90%
80% 80%
2019 2020 2021 2022 2023 2024 2019 2020 2021 2022 2023
Feb. 2020 Jan. 2021
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 18“HOCKEY STICK” INDUSTRIES
Companies in this group had an increase or acceleration in actual results and forecasted results since the onset of COVID-19:
X Retail - Online (see page 51 for Industry Spotlight) X Construction - Single Family (see page 37 for Industry Spotlight)
X Retail - Consumer Staples (see page 49 for Industry Spotlight) X Construction - Multi Family (see page 36 for Industry Spotlight)
As seen below, since the pandemic began, both Retail - Online and Retail - Consumer Staples estimates have increased almost continually and now far exceed
pre-COVID-19 expectations.
RETAIL - ONLINE RETAIL - CONSUMER STAPLES
Long-Term EBIT Trend Analysis Long-Term EBIT Trend Analysis
450% 140%
400%
130%
350%
120%
300%
250% 110%
200%
100%
150%
90%
100%
50% 80%
2019 2020 2021 2022 2023 2019 2020 2021 2022 2023
Feb. 2020 Jan. 2021
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 19THE 2020 VALUE DIVERGENCE
In our inaugural issue, we analyzed how fundamental estimates and equity
prices moved in opposite directions during April and May of 2020. As many
of the prior graphs show, analyst estimates did begin to rebound from
lows at the end of May. However, equity prices have continued to outpace
estimates and exacerbated the overall disconnect.
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 20Market Disconnect
As the disconnect between profit estimates and equity
prices persists, the instinctive reaction is to assume a market
disconnect (e.g., irrational investor behavior). However,
there are clear patterns that have emerged.
As noted earlier, those industries expected to be most
impacted for the long run (L-shaped recovery curves) have
value creation strategies largely dependent on tangible
assets and capital. The lack of recovery in fundamentals is
also reflected in their market value performance relative to
other industries. Tangible asset intensive industries including
Construction - Multi Family and Construction - Single
Family have a similar outlook, despite their sharp recovery
in fundamentals.
Alternatively, those companies with the best market value
performance rely heavily on intangible assets for value
creation. As such, we must consider that financial statement
operating metrics fail to capture the intangible value
creation capacity for intangible intensive value creation
strategies. In future issues, we plan to monitor and further
explore the nontraditional valuation metrics and their
impact on equity prices in certain industries.
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 21PERCENT CHANGE IN TEV AND EBIT FROM FEBRUARY 2020 TO JANUARY 2021
2020 EBIT Long-term EBIT TEV
Oil & Gas*
*Full range not shown
Banks
Airlines*
Insurance
Construction - Multi Family
Gaming, Hospitality, Leisure*
Construction - Single Family
As seen here, despite increases in TEV Healthcare - Provider
for most industries, relatively few Telecommunications
observed an increase in short- and
long-term EBIT. Distribution
Certain industries stand Restaurants
out as extreme outliers. For Construction - Commercial
example, Manufacturing, Media
& Entertainment, and Retail Retail - Consumer Staples
-Discretionary & Luxury show
Healthcare - Life Sciences
meaningful declines in estimates yet
have some of the highest appreciation Retail - Discretionary & Luxury
in market value. In perhaps
Asset Management
the clearest example, Gaming,
Hospitality, Leisure, shows flat Healthcare - Payer
market values over the period despite Healthcare - Medical Devices
massive declines in profit in the short
term and a 22% decline in profitability Media & Entertainment
as far out as 2023. Manufacturing
Despite the continued disconnect, in
Tech. - Software & Services
the next section we analyze recent
trends from September to January Tech. - Semiconductors & Products
that show a decisive recovery in
Tech. - Hardware & Equipment
estimates for many industries.
Retail - Online
-80.0% -60.0% -40.0% -20.0% 0% 20.0% 40.0% 60.0%
-40.0% -20.0% 0.0%
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 22TREND ANALYSIS INSIGHTS
While forward estimates have generally decreased from pre-COVID-19 to
post-COVID-19 expectations, recent observations do point to a significant
recovery in estimates for many industries. From September to January, eight
industries had upward revisions to estimates. This is in contrast to estimates
from March through May, which were generally declining from month
to month.
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 23Increased Estimates From September to January Flat or Little Change From September to January
Technology - Retail -
Healthcare -
Retail - Online Semiconductors Discretionary
Payer
& Products & Luxury
Retail - Technology -
Construction -
Consumer Hardware & Insurance
Single Family
Staples Equipment
Technology -
Construction - Healthcare -
Software & Manufacturing
Multi Family Life Sciences
Services
Construction - Healthcare - Media &
Distribution
Commercial Provider Entertainment
Decreased Estimates From September to January Gaming,
Asset
Hospitality,
Management
Leisure
Telecommunications Restaurants
Healthcare -
Airlines
Medical Devices
Banks Oil & Gas
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 24ANALYST ACCURACY
A multi-year look back of analyst estimates compared to actual results
reveals that near-term estimates (e.g., one year forward) have been
extremely reliable*. Moving further out in time (e.g., three to five years
forward) unsurprisingly shows increasing variability as unforeseen
macroeconomic events and company-specific trends drive divergence. With
additional hindsight now available, we have analyzed accuracy of Q2 and Q3
2020 estimates and compared that to historical accuracy.
*For purposes of the accuracy calculations, actual results have been adjusted to exclude the impact of
acquisitions and dispositions that occurred between the time the estimate was made and the time the
actual result was disclosed. The adjustment assures a like-for-like assessment of organic performance.
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 25AGGREGATE INDUSTRY SURPRISE - REVENUE & EBIT MARGIN*
As the table here shows, almost Telecommunications
all industry sets in aggregate had a Media & Entertainment
positive Q3 surprise for both revenue
Tech. - Software & Services
and EBIT. However, as with Q2, those
hardest hit industries often fared Tech. - Semiconductors & Products
worse than expected, as Oil & Gas and Tech. - Hardware & Equipment
Gaming, Hospitality, Leisure clearly
Retail - Online
show the largest negative surprise.
Retail - Discretionary & Luxury
*Results are calculated as the aggregate Revenue and EBIT Retail - Consumer Staples
consensus estimates for each respective industry set just
prior to each company’s earnings release, as compared to Restaurants
the aggregate Revenue and EBIT actual results for each
respective industry set. Oil & Gas
Manufacturing
Insurance
Revenue Margin EBIT Margin Healthcare - Payer
Healthcare - Medical Devices
Healthcare - Life Sciences
Healthcare - Provider
Gaming, Hospitality, Leisure
Distribution
Construction - Single Family
Construction - Multi Family
Asset Management
Construction - Commercial
Banks
Airlines
-10.0% -5.0% 0.0% 5.0%
-20.0% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0%
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 26AGGREGATE INDUSTRY SURPRISE PERCENT (RELATIVE) - REVENUE & EBIT MARGIN
Telecommunications
Media & Entertainment
Tech. - Software & Services
Tech. - Semiconductors & Products
Tech. - Hardware & Equipment
Retail - Online
Retail - Discretionary & Luxury
Retail - Consumer Staples
Restaurants
Oil & Gas
Manufacturing
Given the varying EBIT margins from
Insurance industry to industry, the graph here
Healthcare - Payer displays the Q2 surprise on a relative
basis. Of note, given the slim EBIT
Healthcare - Medical Devices
margins in the retail industry, the relative
Healthcare - Life Sciences comparison shows the extent of the
Healthcare - Provider positive surprise for Retail – Online and
Retail - Discretionary & Luxury.
Gaming, Hospitality, Leisure
Distribution
Revenue Margin EBIT Margin
Construction - Single Family
Construction - Multi Family
Asset Management
Construction - Commercial
Banks
Airlines
-20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0%
-20.0% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0%
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 27REVENUE ACCURACY DISPERSION
Telecommunications
Media & Entertainment
Finally, we examined the dispersion of
Tech. - Software & Services
the surprises for each industry set. The
table here and the table on the next Tech. - Semiconductors & Products
page display the summary statistics for Tech. - Hardware & Equipment
each industry set and provide immediate
insights on the relative uncertainty that Retail - Online
exists within each industry. As predicted Retail - Discretionary & Luxury
in our last issue, the dispersion of
Retail - Consumer Staples
estimates has declined drastically.
Restaurants
Oil & Gas
Middle 80th Percentile of Observations
Manufacturing
Total Range of Observations
*Full range not shown Insurance
Healthcare - Payer
Healthcare - Medical Devices
Healthcare - Life Sciences
Healthcare - Provider
Gaming,
Hospitality, Leisure*
Distribution
Construction - Single Family
Construction - Multi Family
Asset Management
Construction - Commercial
Banks
Airlines
-100.0% -80.0% -60.0% -40.0% -20.0% 0.0% 20.0%
-20.0% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0%
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 28EBIT MARGIN ACCURACY DISPERSION
Telecommunications
Media & Entertainment
For both revenue and EBIT, the dispersion
Tech. - Software & Services
of surprises declined radically from Q2
to Q3. However, Gaming, Hospitality, Tech. - Semiconductors & Products
Leisure and Airlines continue to be Tech. - Hardware & Equipment
difficult for analysts to forecast.
Retail - Online
Retail - Discretionary & Luxury
Middle 80th Percentile of Observations Retail - Consumer Staples
Total Range of Observations
Restaurants
*Full range not shown
Oil & Gas
Manufacturing
Insurance
Healthcare - Payer
Healthcare - Medical Devices
Healthcare - Life Sciences
Healthcare - Provider
Gaming, Hospitality, Leisure
Distribution
Construction - Single Family
Construction - Multi Family
Asset Management
Construction - Commercial
Airlines*
Banks
-60.0% -40.0% -20.0% 0.0% 20.0% 40.0%
-20.0% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0%
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 29Implications for the Finance Function
The continued impacts of COVID-19 on near-term and long-term operating results For example, transfer pricing policies are predicated on the future resembling the
have implications throughout the finance function of an enterprise. past in terms of revenue growth, expenses and operating margins. Based on the
above data, the future operating profits in 2021 and beyond are expected to be
The effect on financial reporting continues to be a near-term consideration as impaired compared to past performance. As tax departments begin planning for
companies work through the economic crisis and the potential impact on goodwill 2020 tax filings and beyond, such observations represent an opportunity to assess
and asset impairment considerations. the impact of the pandemic. Read the latest related insight from our Transfer
An examination of the 419 companies included in the study shows that as of Q3 Pricing team here.
2020, 85% of companies analyzed had goodwill recorded on their balance sheets. For FP&A groups, bottom-up, company-specific considerations are critical as
An analysis of impairments by industry set shows that only 3.1% of companies with always. However, given the unprecedented uncertainty these groups are facing,
goodwill took an impairment in Q3. Such impairments accounted for only 0.07% of benchmarking to market expectations for peers may provide confirmation to
the total amount of goodwill as of Q3 2020, with 76% of the impairment coming support specific assumptions or, alternatively, raise a red flag to reevaluate
in the Oil & Gas industry. As such, despite some industries with severe degradation certain inputs.
to fundamentals, it appears that rising market values have outweighed impairment A strong start to deals in 2020 shifted to a brief pause in Q2 as many businesses
concerns for nearly all companies under review. and investors braced for the initial COVID-19 impact. Deal activity came roaring
Beyond the initial considerations for financial reporting, there are potential back in Q3, finishing the year strong. Momentum continues at a frenzied pace
implications for the tax, treasury, financial planning and corporate impacting valuations, terms and timelines. While the duration of the driving forces
development functions. is uncertain, for now, corporates are sitting on record levels of cash, the debt
market is in good shape and private equity sponsors still have excess dry powder to
deploy.
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 30Industry Spotlight Guide
LONG-TERM EBIT TREND ANALYSIS
The trend analysis graphs include the aggregate EBIT estimate for the companies To determine the furthest available forecast year, we identified the last year in
in the industry set as of the first day of the following months: February 2020, which substantially all of the companies had analyst estimates for the subject
April 2020, June 2020, September 2020, November 2020 and January 2021. The metric. Additionally, to ensure the integrity of the trend analyses and negate any
estimates extend out for each future period in which meaningful data is available. impact from a survivorship bias, a company included in the long-term analysis
The aggregate estimates for each year (and at each point in time) are common must have not only had analyst estimates for the furthest available forecast year,
sized to the aggregate actual result for 2019. For example, a 2020 estimate of but also all years in the interim and for all dates in which the estimates were pulled
110% would indicate an expected 10% growth for the industry set, whereas a 2020 (e.g., February 2020, May 2020, etc.). The “Change in 2020 EBIT” highlighted on the
estimate of 90% would indicate a 10% expected decline. graphs includes all companies in the industry set, while the “Change in Long-Term
EBIT” highlight (and related graph) only includes those companies that meet the
These graphs show a time lapse of the movement in estimates and provide insights above criteria.
for how both the near-term impact as well as the path toward recovery have
changed since the beginning of the economic crisis.
MARKET CAPITALIZATION CHART
The market capitalization of each company in the industry set, as reported by S&P Capital IQ, is summed to derive a market capitalization value for the industry set. The
resulting charts and movements in market capitalization value are therefore “value weighted,” meaning the movement is more heavily influenced by companies with higher
values. The “value weighted” amounts are then compared to the movement in the S&P 500 index for the same period.
HISTORICAL & FORECAST INDUSTRY STATISTICS
These graphs include the statistical measures of minimum, lower quartile, The model calculates the statistical measures for all companies for which data is
median, upper quartile and maximum. The gray bars represent the total range of available in a given year. As such, caution is advised when considering year-over-
observations within the industry set for a given year. The slate bars represent the year changes, especially in the latter years of the forecast period, as the results may
interquartile range of observations within the industry set for a given year. The be influenced by companies entering or leaving the data set for a given year.
dotted line represents the median from year to year. These graphs are intended to
inform users of both the historical and expected profit margins observed in each
industry set, as well as highlight any anticipated changes. Such data can also serve
to benchmark a forecast for a subject entity, helping to identify inconsistencies and
assess reasonableness.
*For certain industries, estimates for 2019 as of 2/29/2020 will not match 2019 estimates for the other comparison dates due to changes in analyst estimates before actual results were reported and/or surprise results.
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 31INDUSTRY SPOTLIGHT / AIRLINES
LONG-TERM EBIT TREND ANALYSIS MARKET CAPITALIZATION TREND ANALYSIS
-48% Over/(Under) Performance to S&P
140% 500 from February 2020 to January 2021
90%
40%
-10%
-274% Change in 2020 EBIT from
February 2020 to January 2021
-60%
-13% Change in Long-Term EBIT
-110% from February 2020 to January 2021
-160%
2019 2020 2021 2022 2023
Feb. 2020 Apr. 2020 Jun. 2020 Sep. 2020 Nov. 2020 Jan. 2021 Industry Market Capitalization S&P 500
EBIT MARGIN DISTRIBUTION AS OF JANUARY 2021
40%
20%
0%
-20%
-59% Change in Median EBIT
-40% Margin from 2019 to 2020
-60%
-80% 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
-100%
Total Range Interquartile Range Median
Total Range Interquartile Range Median
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 32INDUSTRY SPOTLIGHT / ASSET MANAGEMENT
LONG-TERM EBIT TREND ANALYSIS MARKET CAPITALIZATION TREND ANALYSIS
130%
125%
120%
115%
110%
105% -18% Change in 2020 EBIT from
100% February 2020 to January 2021
95%
-9% Change in Long-Term EBIT
90% from February 2020 to January 2021 -10% Over/(Under) Performance to S&P
85% 500 from February 2020 to January 2021
80%
2019 2020 2021
Feb. 2020 Apr. 2020 Jun. 2020 Sep. 2020 Nov. 2020 Jan. 2021 Industry Market Capitalization S&P 500
EBIT MARGIN DISTRIBUTION AS OF JANUARY 2021
120% 0% Change in Median EBIT
Margin from 2019 to 2020
100%
80%
60%
40%
20%
0%
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
-20%
-40%
Total Range Interquartile Range Median
Total Range Interquartile Range Median
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 33INDUSTRY SPOTLIGHT / BANKS
LONG-TERM EBT TREND ANALYSIS MARKET CAPITALIZATION TREND ANALYSIS
110%
100%
90%
80%
70%
-8% Change in 2020 EBT from
60%
February 2020 to January 2021
50%
-20% Change in Long-Term EBT -34% Over/(Under) Performance to S&P
40% from February 2020 to January 2021 500 from February 2020 to January 2021
30%
2019 2020 2021 2022
Feb. 2020 Apr. 2020 Jun. 2020 Sep. 2020 Nov. 2020 Jan. 2021 Industry Market Capitalization S&P 500
EBT MARGIN DISTRIBUTION AS OF JANUARY 2021
50%
45%
40%
35%
30%
25% 0% Change in Median EBT
Margin from 2019 to 2020
20%
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Total Range Interquartile Range Median
Total Range Interquartile Range Median
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 34INDUSTRY SPOTLIGHT / CONSTRUCTION - COMMERCIAL
LONG-TERM EBIT TREND ANALYSIS MARKET CAPITALIZATION TREND ANALYSIS
190%
180%
170%
160%
150%
140%
130% -18% Change in 2020 EBIT from
120% February 2020 to January 2021
110% -4% Change in Long-Term EBIT -23% Over/(Under) Performance to S&P
100% from February 2020 to January 2021 500 from February 2020 to January 2021
90%
2019 2020 2021
Feb. 2020 Apr. 2020 Jun. 2020 Sep. 2020 Nov. 2020 Jan. 2021 Industry Market Capitalization S&P 500
EBIT MARGIN DISTRIBUTION AS OF JANUARY 2021
20%
1% Change in Median EBIT
Margin from 2019 to 2020
15%
10%
5%
0%
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
-5%
Total Range Interquartile Range Median
Total Range Interquartile Range Median
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 35INDUSTRY SPOTLIGHT / CONSTRUCTION - MULTI FAMILY
LONG-TERM EBIT TREND ANALYSIS MARKET CAPITALIZATION TREND ANALYSIS
160%
150%
140%
130%
120%
110%
6% Change in 2020 EBIT from
100% February 2020 to January 2021
90% 31% Change in Long-Term EBIT from -1% Over/(Under) Performance to S&P
80% February 2020 to January 2021 500 from February 2020 to January 2021
70%
2019 2020 2021
Feb. 2020 Apr. 2020 Jun. 2020 Sep. 2020 Nov. 2020 Jan. 2021 Industry Market Capitalization S&P 500
EBIT MARGIN DISTRIBUTION AS OF JANUARY 2021
40%
35%
30%
25%
20%
15%
10%
5%
0%
-5% 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
-10%
-15% 2% Change in Median EBIT
Margin from 2019 to 2020 Total Range Interquartile Range Median
Total Range Interquartile Range Median
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 36INDUSTRY SPOTLIGHT / CONSTRUCTION - SINGLE FAMILY
LONG-TERM EBIT TREND ANALYSIS MARKET CAPITALIZATION TREND ANALYSIS
180%
170%
160%
14% Change in 2020 EBIT from
150%
February 2020 to January 2021
140%
130% 39% Change in Long-Term EBIT
from February 2020 to January 2021
120%
110%
2% Over/(Under) Performance to S&P
100% 500 from February 2020 to January 2021
90%
80%
2019 2020 2021
Feb. 2020 Apr. 2020 Jun. 2020 Sep. 2020 Nov. 2020 Jan. 2021 Industry Market Capitalization S&P 500
EBIT MARGIN DISTRIBUTION AS OF JANUARY 2021
40%
35%
30%
25%
20%
15%
10%
5%
0%
-5% 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
-10%
-15% 1% Change in Median EBIT
Margin from 2019 to 2020 Total Range Interquartile Range Median
Total Range Interquartile Range Median
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 37INDUSTRY SPOTLIGHT / DISTRIBUTION
LONG-TERM EBIT TREND ANALYSIS MARKET CAPITALIZATION TREND ANALYSIS
140%
130%
120%
110%
100%
90%
-31% Change in 2020 EBIT from
80% February 2020 to January 2021 -11% Over/(Under) Performance to S&P
70% 500 from February 2020 to January 2021
-9% Change in Long-Term EBIT from
60% February 2020 to January 2021
50%
2019 2020 2021 2022 2023
Feb. 2020 Apr. 2020 Jun. 2020 Sep. 2020 Nov. 2020 Jan. 2021 Industry Market Capitalization S&P 500
EBIT MARGIN DISTRIBUTION AS OF JANUARY 2021
0% Change in Median EBIT
16% Margin from 2019 to 2020
14%
12%
10%
8%
6%
4%
2%
0%
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Total Range Interquartile Range Median
Total Range Interquartile Range Median
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 38INDUSTRY SPOTLIGHT / GAMING, HOSPITALITY, LEISURE
LONG-TERM EBIT TREND ANALYSIS MARKET CAPITALIZATION TREND ANALYSIS
-157% Change in 2020 EBIT from -37% Over/(Under) Performance to S&P
180% February 2020 to January 2021 500 from February 2020 to January 2021
130%
80%
30%
-22% Change in Long-Term EBIT
-20% from February 2020 to January 2021
-70%
2019 2020 2021 2022 2023
Feb. 2020 Apr. 2020 Jun. 2020 Sep. 2020 Nov. 2020 Jan. 2021 Industry Market Capitalization S&P 500
EBIT MARGIN DISTRIBUTION AS OF JANUARY 2021
50%
0%
-50%
-19% Change in Median EBIT
Margin from 2019 to 2020
-100%
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
-150%
-200%
Total Range Interquartile Range Median
Total Range Interquartile Range Median
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 39INDUSTRY SPOTLIGHT / HEALTHCARE - PROVIDER
LONG-TERM EBIT TREND ANALYSIS MARKET CAPITALIZATION TREND ANALYSIS
120%
115%
110%
105%
100%
95% 4% Change in 2020 EBIT from
90% February 2020 to January 2021
85%
0% Change in Long-Term EBIT from -8% Over/(Under) Performance to S&P
80% February 2020 to January 2021 500 from February 2020 to January 2021
75%
70%
2019 2020 2021 2022
Feb. 2020 Apr. 2020 Jun. 2020 Sep. 2020 Nov. 2020 Jan. 2021 Industry Market Capitalization S&P 500
EBIT MARGIN DISTRIBUTION AS OF JANUARY 2021
-2% Change in Median EBIT
Margin from 2019 to 2020
Total Range Interquartile Range Median
Total Range Interquartile Range Median
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 40INDUSTRY SPOTLIGHT / HEALTHCARE - LIFE SCIENCES
LONG-TERM EBIT TREND ANALYSIS MARKET CAPITALIZATION TREND ANALYSIS
140%
0% Change in 2020 EBIT from
135% February 2020 to January 2021
130%
125%
120%
115%
110%
105%
100% -2% Change in Long-Term EBIT from 1% Over/(Under) Performance to S&P
February 2020 to January 2021 500 from February 2020 to January 2021
95%
90%
2019 2020 2021 2022 2023 2024
Feb. 2020 Apr. 2020 Jun. 2020 Sep. 2020 Nov. 2020 Jan. 2021 Industry Market Capitalization S&P 500
EBIT MARGIN DISTRIBUTION AS OF JANUARY 2021
80% 5% Change in Median EBIT
Margin from 2019 to 2020
70%
60%
50%
40%
30%
20%
10%
0%
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Total Range Interquartile Range Median
Total Range Interquartile Range Median
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 41INDUSTRY SPOTLIGHT / HEALTHCARE - MEDICAL DEVICES
LONG-TERM EBIT TREND ANALYSIS MARKET CAPITALIZATION TREND ANALYSIS
150%
140%
130%
120%
110%
100%
-17% Change in 2020 EBIT from 2% Over/(Under) Performance to S&P
90% February 2020 to January 2021 500 from February 2020 to January 2021
80%
-5% Change in Long-Term EBIT from
70% February 2020 to January 2021
60%
2019 2020 2021 2022 2023
Feb. 2020 Apr. 2020 Jun. 2020 Sep. 2020 Nov. 2020 Jan. 2021 Industry Market Capitalization S&P 500
EBIT MARGIN DISTRIBUTION AS OF JANUARY 2021
-2% Change in Median EBIT
50% Margin from 2019 to 2020
40%
30%
20%
10%
0%
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
-10%
-20%
Total Range Interquartile Range Median
Total Range Interquartile Range Median
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 42INDUSTRY SPOTLIGHT / HEALTHCARE - PAYER
LONG-TERM EBIT TREND ANALYSIS MARKET CAPITALIZATION TREND ANALYSIS
150%
2% Change in 2020 EBIT from
140% February 2020 to January 2021
130%
120%
110%
-1% Change in Long-Term EBIT from 2% Over/(Under) Performance to S&P
100% February 2020 to January 2021 500 from February 2020 to January 2021
90%
2019 2020 2021 2022 2023
Feb. 2020 Apr. 2020 Jun. 2020 Sep. 2020 Nov. 2020 Jan. 2021 Industry Market Capitalization S&P 500
EBIT MARGIN DISTRIBUTION AS OF JANUARY 2021
12% -1% Change in Median EBIT
Margin from 2019 to 2020
10%
8%
6%
4%
2%
0%
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Total Range Interquartile Range Median
Total Range Interquartile Range Median
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 43INDUSTRY SPOTLIGHT / INSURANCE
LONG-TERM EBIT TREND ANALYSIS MARKET CAPITALIZATION TREND ANALYSIS
115%
110%
105%
100%
95%
-20% Change in 2020 EBIT from
90%
February 2020 to January 2021
85%
-16% Change in Long-Term EBIT -24% Over/(Under) Performance to S&P
80%
from February 2020 to January 2021 500 from February 2020 to January 2021
75%
70%
2019 2020 2021
Feb. 2020 Apr. 2020 Jun. 2020 Sep. 2020 Nov. 2020 Jan. 2021 Industry Market Capitalization S&P 500
EBIT MARGIN DISTRIBUTION AS OF JANUARY 2021
30% -3% Change in Median EBIT
Margin from 2019 to 2020
25%
20%
15%
10%
5%
0%
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Total Range Interquartile Range Median
Total Range Interquartile Range Median
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 44INDUSTRY SPOTLIGHT / MANUFACTURING
LONG-TERM EBIT TREND ANALYSIS MARKET CAPITALIZATION TREND ANALYSIS
200%
-29% Change in 2020 EBIT from
February 2020 to January 2021
180%
160%
140%
120%
-11% Change in Long-Term EBIT 4% Over/(Under) Performance to S&P
100% from February 2020 to January 2021 500 from February 2020 to January 2021
80%
2019 2020 2021 2022 2023
Feb. 2020 Apr. 2020 Jun. 2020 Sep. 2020 Nov. 2020 Jan. 2021 Industry Market Capitalization S&P 500
EBIT MARGIN DISTRIBUTION AS OF JANUARY 2021
35%
30%
25%
20%
15%
10%
5%
0%
-5% 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
-10%
-15% -1% Change in Median EBIT
Margin from 2019 to 2020 Total Range Interquartile Range Median
Total Range Interquartile Range Median
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 45INDUSTRY SPOTLIGHT / MEDIA & ENTERTAINMENT
LONG-TERM EBIT TREND ANALYSIS MARKET CAPITALIZATION TREND ANALYSIS
180%
-17% Change in 2020 EBIT from
February 2020 to January 2021
160%
140%
120%
100%
0% Change in Long-Term EBIT from 11% Over/(Under) Performance to S&P
80% February 2020 to January 2021 500 from February 2020 to January 2021
60%
2019 2020 2021 2022 2023
Feb. 2020 Apr. 2020 Jun. 2020 Sep. 2020 Nov. 2020 Jan. 2021 Industry Market Capitalization S&P 500
EBIT MARGIN DISTRIBUTION AS OF JANUARY 2021
80%
60%
40%
20%
0%
-20%
-40% 1% Change in Median EBIT
-60% Margin from 2019 to 2020
-80%
-100% 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
-120%
Total Range Interquartile Range Median
Total Range Interquartile Range Median
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 46INDUSTRY SPOTLIGHT / OIL & GAS
LONG-TERM EBIT TREND ANALYSIS MARKET CAPITALIZATION TREND ANALYSIS
-85% Change in 2020 EBIT from -41% Over/(Under) Performance to S&P
180% February 2020 to January 2021 500 from February 2020 to January 2021
160%
140%
120%
100%
80%
60%
40%
-35% Change in Long-Term EBIT
20% from February 2020 to January 2021
0%
2019 2020 2021 2022
Feb. 2020 Apr. 2020 Jun. 2020 Sep. 2020 Nov. 2020 Jan. 2021 Industry Market Capitalization S&P 500
EBIT MARGIN DISTRIBUTION AS OF JANUARY 2021
60%
40%
20%
0%
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
-20%
-40%
-60%
-14% Change in Median EBIT
-80% Margin from 2019 to 2020
-100%
Total Range Interquartile Range Median
Total Range Interquartile Range Median
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 47INDUSTRY SPOTLIGHT / RESTAURANTS
LONG-TERM EBIT TREND ANALYSIS MARKET CAPITALIZATION TREND ANALYSIS
140%
-40% Change in 2020 EBIT from
February 2020 to January 2021
130%
120%
110%
100%
90% -7% Change in Long-Term EBIT from -8% Over/(Under) Performance to S&P
February 2020 to January 2021 500 from February 2020 to January 2021
80%
70%
2019 2020 2021 2022 2023
Feb. 2020 Apr. 2020 Jun. 2020 Sep. 2020 Nov. 2020 Jan. 2021 Industry Market Capitalization S&P 500
EBIT MARGIN DISTRIBUTION AS OF JANUARY 2021
-4% Change in Median EBIT
50% Margin from 2019 to 2020
40%
30%
20%
10%
0%
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
-10%
Total Range Interquartile Range Median
Total Range Interquartile Range Median
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 48INDUSTRY SPOTLIGHT / RETAIL - CONSUMER STAPLES
LONG-TERM EBIT TREND ANALYSIS MARKET CAPITALIZATION TREND ANALYSIS
135% 4% Change in 2020 EBIT from
130% February 2020 to January 2021
125%
120%
115%
110%
105%
0% Change in Long-Term EBIT from 10% Over/(Under) Performance to S&P
100%
February 2020 to January 2021 500 from February 2020 to January 2021
95%
90%
2019 2020 2021 2022 2023
Feb. 2020 Apr. 2020 Jun. 2020 Sep. 2020 Nov. 2020 Jan. 2021 Industry Market Capitalization S&P 500
EBIT MARGIN DISTRIBUTION AS OF JANUARY 2021
-1% Change in Median EBIT
25% Margin from 2019 to 2020
20%
15%
10%
5%
0%
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Total Range Interquartile Range Median
Total Range Interquartile Range Median
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 49INDUSTRY SPOTLIGHT / RETAIL - DISCRETIONARY & LUXURY
LONG-TERM EBIT TREND ANALYSIS MARKET CAPITALIZATION TREND ANALYSIS
230%
-41% Change in 2020 EBIT from
210%
February 2020 to January 2021
190%
170%
150%
130%
110%
8% Over/(Under) Performance to S&P
90%
500 from February 2020 to January 2021
70% -5% Change in Long-Term EBIT from
February 2020 to January 2021
50%
2019 2020 2021 2022 2023
Feb. 2020 Apr. 2020 Jun. 2020 Sep. 2020 Nov. 2020 Jan. 2021 Industry Market Capitalization S&P 500
EBIT MARGIN DISTRIBUTION AS OF JANUARY 2021
30%
-1% Change in Median EBIT
25% Margin from 2019 to 2020
20%
15%
10%
5%
0%
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
-5%
-10%
Total Range Interquartile Range Median
Total Range Interquartile Range Median
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 50INDUSTRY SPOTLIGHT / RETAIL - ONLINE
LONG-TERM EBIT TREND ANALYSIS MARKET CAPITALIZATION TREND ANALYSIS
440% 18% Change in 2020 EBIT from
February 2020 to January 2021
390%
25% Change in Long-Term EBIT
340% from February 2020 to January 2021
290%
240%
190%
65% Over/(Under) Performance to S&P
140%
500 from February 2020 to January 2021
90%
2019 2020 2021 2022 2023
Feb. 2020 Apr. 2020 Jun. 2020 Sep. 2020 Nov. 2020 Jan. 2021 Industry Market Capitalization S&P 500
EBIT MARGIN DISTRIBUTION AS OF JANUARY 2021
2% Change in Median EBIT
40% Margin from 2019 to 2020
30%
20%
10%
0%
-10%
-20%
-30%
-40%
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
-50%
-60%
Total Range Interquartile Range Median
Total Range Interquartile Range Median
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 51INDUSTRY SPOTLIGHT / TECHNOLOGY - HARDWARE & EQUIPMENT
LONG-TERM EBIT TREND ANALYSIS MARKET CAPITALIZATION TREND ANALYSIS
130% -6% Change in 2020 EBIT from
February 2020 to January 2021
120%
110%
100%
90%
80% -9% Change in Long-Term EBIT from 37% Over/(Under) Performance to S&P
February 2020 to January 2021 500 from February 2020 to January 2021
70%
2019 2020 2021 2022
Feb. 2020 Apr. 2020 Jun. 2020 Sep. 2020 Nov. 2020 Jan. 2021 Industry Market Capitalization S&P 500
EBIT MARGIN DISTRIBUTION AS OF JANUARY 2021
-1% Change in Median EBIT
Margin from 2019 to 2020
Total Range Interquartile Range Median
Total Range Interquartile Range Median
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 52INDUSTRY SPOTLIGHT / TECHNOLOGY - SEMICONDUCTORS & PRODUCTS
LONG-TERM EBIT TREND ANALYSIS MARKET CAPITALIZATION TREND ANALYSIS
2% Change in 2020 EBIT from
120% February 2020 to January 2021
115%
110%
105%
100%
95% -5% Change in Long-Term EBIT from 4% Over/(Under) Performance to S&P
February 2020 to January 2021 500 from February 2020 to January 2021
90%
2019 2020 2021 2022
Feb. 2020 Apr. 2020 Jun. 2020 Sep. 2020 Nov. 2020 Jan. 2021 Industry Market Capitalization S&P 500
EBIT MARGIN DISTRIBUTION AS OF JANUARY 2021
0% Change in Median EBIT
Margin from 2019 to 2020
Total Range Interquartile Range Median
Total Range Interquartile Range Median
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 53INDUSTRY SPOTLIGHT / TECHNOLOGY - SOFTWARE & SERVICES
LONG-TERM EBIT TREND ANALYSIS MARKET CAPITALIZATION TREND ANALYSIS
190% -1% Change in 2020 EBIT from
February 2020 to January 2021
180%
170%
160%
150%
140%
130%
120%
1% Change in Long-Term EBIT from 24% Over/(Under) Performance to S&P
110% February 2020 to January 2021 500 from February 2020 to January 2021
100%
90%
2019 2020 2021 2022 2023
Feb. 2020 Apr. 2020 Jun. 2020 Sep. 2020 Nov. 2020 Jan. 2021 Industry Market Capitalization S&P 500
EBIT MARGIN DISTRIBUTION AS OF JANUARY 2021
80%
60%
40%
20%
0%
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
-20%
-40% 2% Change in Median EBIT
Margin from 2019 to 2020
-60%
Total Range Interquartile Range Median
Total Range Interquartile Range Median
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 54INDUSTRY SPOTLIGHT / TELECOMMUNICATIONS
LONG-TERM EBIT TREND ANALYSIS MARKET CAPITALIZATION TREND ANALYSIS
-16% Change in 2020 EBIT from
120% February 2020 to January 2021
115%
110%
105%
100%
-11% Change in Long-Term EBIT -20% Over/(Under) Performance to S&P
95% from February 2020 to January 2021 500 from February 2020 to January 2021
90%
2019 2020 2021 2022
Feb. 2020 Apr. 2020 Jun. 2020 Sep. 2020 Nov. 2020 Jan. 2021 Industry Market Capitalization S&P 500
EBIT MARGIN DISTRIBUTION AS OF JANUARY 2021
1% Change in Median EBIT
60% Margin from 2019 to 2020
40%
20%
0%
-20%
-40%
-60% 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
-80%
Total Range Interquartile Range Median
Total Range Interquartile Range Median
THE PATH AHEAD... RECOVERY CURVES TAKE SHAPE / VBA FORECAST ENGINE INDUSTRY IMPACT STUDY, ISSUE 3 55You can also read
