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More than 40% of S&P 500 companies abandoned forecasts due to coronavirus

Mon Jun 29, 2020
watermark Economic news

More than 40% of the S&P 500 companies withdrew quarterly or annual forecasts due to the uncertainty surrounding the outbreak of coronavirus. As the reasons, some of them noted the likelihood of new outbreaks of the disease, changes in consumer behavior and additional costs.

According to The Wall Street Journal, the stocks of the companies that made this decision have fallen in price by 18.2% since the beginning of the year, while the S&P 500 value fell by 6.9%. Many companies that have withdrawn forecasts are most affected by the industry pandemic – the telecommunications, entertainment, automotive, and industrial goods sectors.

However, among these companies there are those who have benefited from the effects of the pandemic. For example, this is the Kroger Co. supermarket chain, whose sales have jumped, and capitalization has increased by almost 13% since the beginning of the year. Payment system PayPal Holdings Inc. over the period of the pandemic, it added 58% against the backdrop of an increase in online trading.

Uncertainty is also associated with the lifting of quarantine measures in the United States. Texas and Florida reinstated some restrictions last week due to a spike in new cases. Many S&P 500 companies updated their forecasts due to a coronavirus outbreak: 154 companies worsened expectations in at least some indicators, while 28 improved forecasts.

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