Reporting season stock picks

The market will turn its attention to fundamentals in August as reported earnings will be evaluated against an elevated market PE of >16x. Central banks have proven to be the antidote for equity markets against a global backdrop of economic, political and social uncertainty. However, with sections of the market now trading on full valuations, growth in corporate earnings is key if markets are to re-rate further. While the market has been riding a wave of stimulus-induced optimism post-Brexit, we remind investors to be wary of complacency heading into the August reporting season. We advocate trimming risk, and re-positioning into stocks where earnings risks are skewed to the upside, preferably backed by bottom-up conviction. In this post, we highlight four companies as upside surprise candidates this reporting season, along with comments from our team of Research Analysts: (VIEW LINK)