Largest share price falls during earnings
This week’s Chart of the Week comes from Morningstar’s market strategist Lochlan Halloway’s earnings analysis. The chart only assesses company results and ensuing market reactions up until the 21st of August.
Earnings season is always hotly anticipated. This half-yearly beauty contest provides long-term investors the opportunity to overreact to short-term results while traders try and profit from guessing the direction of this overreaction. At Morningstar, our analysts pay close attention to earnings, but the focus is on long-term results and valuations. A single earnings report usually doesn’t lead to a change in the long-term assumptions behind our assessment of a stock’s fair value, unless a company also comes out with new,…
