Corbin Advisors Releases Q1’25 Inside The Buy-Side® Earnings Primer®

Survey Finds Largest Pullback in Investor Sentiment in a Decade amid Radical Uncertainty

• Both investor sentiment and perceived executive tone exhibit 40%+ pullbacks in optimism QoQ, the largest on record in a decade
• Growth expectations have reversed, as 64% now anticipate 2025 U.S. GDP to be Lower YoY, while only 22% expect it to be Higher; notably, 59% expect the U.S. to enter a recession, up from 22% last quarter
• Over half cite Tariffs as the leading area of concern and topic of interest for upcoming earnings calls
• Investors are divided over whether companies will Maintain or Lower annual guidance, with virtually none expecting raises amid the volatility in policy directives
• While a majority, 77%, prefer companies include the impact of tariffs in outlook updates, 60% support the decision to rescind in the near term amid an inability to quantify impact
• Debt Paydown reemerges as the top preferred cash use, overtaking Reinvestment, while backing for Dry Powder also climbs, underscoring recessionary concerns

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Corbin Advisors, a strategic consultancy accelerating value realization globally, today released its quarterly Earnings Primer®, which captures trends in institutional investor sentiment. The survey, which marks the 62^nd issue of Inside The Buy-Side® Earnings Primer®, was conducted from March 6^th to April 2^nd, 2025, and is based on responses from 72 institutional investors and sell-side analysts globally, representing ~$5.9 trillion in equity assets under management. Additionally, following the Trump Administration’s April 2^nd reciprocal tariff announcement, the firm surveyed 40 additional investors and analysts April 3^rd to April 7^th, 2025, to capture real-time views and expectations regarding upcoming earnings communications, including annual guidance.

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Following last quarter’s survey which found a notable pickup in sentiment but with new and persistent challenges tempering outright bullishness, including policy uncertainty and tariff concerns, the Voice of Investor® captured in this quarter’s survey reveals a stark reversal in optimism. Indeed, sentiment marks the largest QoQ pullback in bullishness on record in a decade, driven by acute tariff concerns, policy trepidation, and deteriorating growth forecasts.

Rebecca Corbin, Founder and CEO of Corbin Advisors, commented, “Time and time again, our research has conclusively linked transparency with management credibility, and the power of transparency is never more important than during times of radical uncertainty and market distress. Massive market swings, extreme volatility, and minute-by-minute tariff headline changes have dealt public company management teams yet another set of challenges to navigate. Executives who lean into educating investors on their company in the context of the current framework and long-term fundamentals, while remaining thoughtful about near-term uncertainty, will serve to build trust. Importantly, investors are not expecting companies to be prescriptive, conclusive, or have all the answers; rather, they are seeking executives’ best efforts to help them understand actual and highly likely impacts and strategies to mitigate risk.

While the 90-day reprieve on reciprocal tariffs excluding China is welcomed, it serves to extend uncertainty in the increasingly psychologically unsafe environment in which we’re currently operating. Those companies that will emerge stronger from this period will demonstrate the ability to control the controllable, execute with agility in the near term while not losing sight of advancing the long-term strategy, communicate honestly and straightforwardly, and bring investors along with them. Proactive disclosure of the impacts to cost, revenue, and/or margins, tariff mitigation strategies, including pricing actions and cost savings to offset impacts, downturn playbooks, and scenario analyses are proven communication strategies that build credibility with investors.”

Less than one-quarter of investors, 24%, report current sentiment as Neutral to Bullish or Bullish, down from 65% in Q4’24. Instead, 40% characterize views as Neutral to Bearish or Bearish, up from the 15% observed last quarter. As for executives, 35% are perceived as Neutral to Bearish or Bearish, a notable 28-point uptick, while just 29% describe leaders as Bullish or Neutral to Bullish, down from 72%. Taken together, these figures represent the fifth — and most severe — instance of a 20%+ sequential drawdown in investor and executive optimism on record.

As for Q1 KPIs, expectations suggest a prevailing view of Worsening over Improving conditions, particularly for Revenue and EPS, though sentiment on Operating Margins and FCF are more neutral, with a larger portion of respondents foreseeing sequential Stability in the near term. Importantly, a majority of respondents, 53%, expect earnings results to be In Line with consensus, though calls for Beats falls more than two-fold QoQ, and those anticipating Misses more than doubles.

Owing to the tumult are declining U.S. growth forecasts. To that end, 64% anticipate 2025 GDP will come in Lower YoY, while only 22% expect it to be Higher, down from 46%. As a result, nearly 6 in 10 investors are bracing for the U.S. to enter a recession, a sharp increase from 22% last quarter. Moreover, investors are back to prioritizing margins over growth — 71% to 29%, respectively — the highest disparity observed since tracking began in Q4’23.

Tariffs along with Growth & Demand trends are identified as the primary focus areas for upcoming earnings calls, each noted by 64% of participants, followed by Margins at 41%. Similarly, Tariffs also top the list of unaided concerns this quarter (55%), followed by a 41-point uptick in those citing an Economic Slowdown (53%).

Regarding annual guidance, prior to the April 2^nd reciprocal tariff announcement, more investors and analysts anticipated companies would Maintain 2025 outlooks across Revenue, EPS, Operating Margins, and FCF, with roughly 40% expecting Lower forecasts. Following the news, 57% expect a meaningful downgrade to earnings forecasts across most sectors. While a majority, 77%, prefer companies include the impact of tariffs in guidance updates, 60% indicate support for companies if they elect to rescind annual guides. If doing so, scenario analysis is strongly encouraged.

“Long term, there are reasons to be optimistic in theory but there is so much policy uncertainty, it waivers day-by-day. There are times when it feels very negative. Given the volatility, I am leaning more bearish than bullish, slightly negative,” commented a portfolio manager whose firm manages $66 billion in EAUM.

Turning to capital allocation preferences, Debt Paydown reemerges as the top preferred use, supported by 64% of investors and overtaking Reinvestment at 49%, which now falls to the #2 position. Backing for Dry Powder, or cash hoarding, also climbs. Conversely, only 13% favor M&A at this time, down 19 points QoQ.

Turning to sector sentiment, Healthcare experiences a substantial rise in optimism, climbing 42 points QoQ to become the most favored sector. Meanwhile, Tech remains highly preferred despite a 19-point increase in bearish sentiment. On the other hand, Consumer Discretionary sees a surge in pessimism, reaching its highest level of bears since 2020 and surpassing Clean Energy as the sector with the most downbeat outlook.

About Corbin Advisors

Since 2007, Corbin Advisors has tracked investor sentiment on a quarterly basis. Access Inside The Buy-Side^® and other research on real-time investor sentiment, IR best practices, and case studies at CorbinAdvisors.com.

Corbin is a leading investor research and investor communications advisory firm accelerating value realization globally. We engage deeply with our clients — companies ranging from pre-IPO to over $550 billion in market cap across all sectors globally — to increase equity market value. We deliver research-based insights and execution excellence through a cultivated and caring team of experts with deep sector and situational experience, a best practice approach, and an outperformance mindset. We have a long track record of delivering successful client outcomes, most notably by rerating and compounding equity valuations through our Voice of Investor® research and counsel.

Inside The Buy-Side^®, our industry-leading research publication, is covered by news affiliates globally and regularly featured on CNBC.

To learn more about us and our impact, visit CorbinAdvisors.com.

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