Have guidance practices changed in Mexico since 2021?

Guidance is a powerful tool for providing transparency, enhancing investor trust, and aligning market expectations. Back in 2021, we analyzed which companies in Mexico were back to giving guidance post the pandemic, and we found that many companies that had stopped providing guidance during the pandemic, had not decided to provide guidance again yet.  

Since conditions have vastly changed since then, we are revisiting this analysis to examine how the market has moved. 

A note on methodology: some companies reviewed in our 2021 analysis are no longer publicly listed for several reasons: some delisted for strategic reasons (Santander and Lala), others faced bankruptcy (Crédito Real and Unifin), some were acquired (Ienova and Planigrupo, Fibra HD and Terrafina), etc. These moves naturally have an impact on industry averages, so when necessary, we have made changes to historic data to make the numbers comparable.  

So, without further ado, here are the key takeaways in how guidance practices have evolved over the last three years across all industries: 

• Overall, 30% of the market provides written guidance at the moment. This compares to 29% back in 2021. Having said that, there were some interesting changes if we analyze this sector by sector. 

• The sectors with the highest increase in guidance providers were FIBRAs (+20%), Healthcare (+20%), and Food & Beverage (+18%).  

• 33% of the companies increased the number of metrics they provide guidance on vs 2021. This moved the average number of metrics included in guidance strategies from 3 to 4 in the overall market. 

• Providing guidance on a quarterly basis has become less popular. Two thirds of the market now prefer to share guidance expectations on an annual or discretional basis. 

• We now see more companies using their corporate presentations as the preferred communication avenue.  

• Providing range estimates continues to be, by far, the most popular strategy to provide guidance. Interestingly, using directional guidance has become more common.  

We continue to believe that providing guidance is a best practice for publicly listed companies. By offering insight into expected earnings, companies can reduce market uncertainty and volatility. Guidance also demonstrates transparency and fosters trust with shareholders, as it shows that the company has a well-defined strategy and is actively managing risks. Moreover, guidance allows companies to align market expectations with their internal performance goals, mitigating the risk of surprises that could negatively impact stock price or investor confidence. 

We, at Miranda IR, would love to help you find a guidance strategy that fits your needs. 

Mexican guidance practices in 2024

Source: Publicly available company materials