Earnings Guidance: 2024 Metrics Analysis and Recommendations for the Future

As we move into the second half of the year, it is essential to prepare for the close of 2024 and reflect on how to improve in the coming periods. With this goal in mind, we have analyzed the guidance reports of some of the main IPC companies. This analysis highlights the key metrics used by each sector, providing a clear view of common priorities and strategies, as well as the main advantages and disadvantages of providing guidance and our recommendations on the matter.

The main metrics in the consumer sector include revenue, EBITDA, sales growth, Capex, EBITDA margin, and debt/EBITDA ratio. These metrics reflect a focus on operational expansion, cost optimization, and operational efficiency. In contrast, the financial sector focuses on loan and deposit growth, net interest margin (NIM), fee income, efficiency ratio, cost of risk, return on equity (ROE), and return on assets (ROA). Additionally, metrics such as non-performing loans (NPLs), coverage ratio, and capitalization ratio are crucial for assessing financial health and risk management in institutions.

In the industrial and materials sector, companies prioritize metrics such as EBITDA growth, free cash flow conversion rate, and Capex, demonstrating a commitment to operational efficiency and the expansion of productive capacities. Meanwhile, the transportation and logistics sector highlights metrics such as ASM (Available Seat Miles) growth, EBITDA margin, Capex, and passenger traffic, focusing on capacity management and network optimization. Finally, in the real estate sector, companies focus on metrics such as revenue growth, adjusted NOI margin, and adjusted EBITDA margin, reflecting a strong focus on operational efficiency and property portfolio expansion.

Overall, sectors primarily focus on revenue and profitability, highlighting the importance of operational efficiency and sustainable growth. However, each sector has its specificities: the consumer sector has a greater emphasis on expansion and cost management, while the financial sector pays special attention to risk management and financial stability. The industrial and materials sector focuses on optimizing efficiency and expanding productive capacity, while the transportation and logistics sector focuses on improving customer experience and infrastructure management. The real estate sector, meanwhile, seeks to maximize income and efficiently manage its property portfolio.

Advantages and Disadvantages of Providing Guidance

Advantages:

1. Clarity and transparency: Providing guidance helps set clear expectations with investors and analysts, strengthening confidence in the company.
2. Strategic planning: It facilitates internal planning and alignment of business objectives with market expectations.
3. Expectation management: It allows the management of market expectations and minimizes negative surprises.

Disadvantages:

1. Risk of exposure: Providing overly optimistic guidance can result in downward revisions, affecting the company’s credibility.
2. Competition: It can reveal strategies to competitors, affecting competitive advantage.
3. Additional pressure: Meeting established expectations can create additional pressure on management and operations.

In summary, the advantages of providing guidance outweigh the disadvantages, as long as it is based on realistic and well-founded data. It is crucial to avoid being overly conservative or optimistic, as both extremes can affect market perception and credibility. A precise and assertive guidance is a good method to build trust and establish a solid foundation for future growth. At Miranda IR, we are happy to help you develop a communication strategy to improve the company’s relationship with the market.