Various supply shortages have not only brought huge losses to the sales of automakers, but also caused companies to lower their sales and profitability expectations, and market concerns are also spreading.
Supply chain shortages have dealt a blow to global companies, making investors more worried about corporate earnings expectations.
At the beginning of the North American holiday shopping season, the recovery of demand and continued shortages in supply prompted analysts to lower their expectations for the upcoming U.S. stocks earnings season.
In the semiconductor industry, the prices of DRAM and NAND chips seem to have peaked. Chip manufacturing giants Samsung Electronics, Micron Technology and Intel’s earnings expectations for the next 12 months have fluctuated or declined in the past two months, and their stock prices have fallen by about 20% or more from their recent highs.
The share price of leading home furnishing company Bed Bath & Beyond has plummeted 65% since early June. There are multiple bottlenecks in its supply chain, and this is the time to stock up for the most important shopping season of the year.
After Citigroup’s Global Earnings Correction Index hit an all-time high in May, it is currently falling to negative values. The index is a global indicator that measures analysts’ upward or downward profit forecasts.
Nike also lowered its sales forecast at the end of September due to the suspension of production at its factory in Vietnam. Currently, thousands of workers are leaving the factory.
Since late August, the Morgan Stanley Capital International (MSCI) AC Global Auto and Parts Index has been climbing to a seven-month high.
Bloomberg predicts that due to factory closures and extended delivery times, the semiconductor industry is not expected to have more capacity until the second half of 2022.
According to Bloomberg, Susquehanna analyst Christopher Rolland said:
Although many companies’ revenues have soared to record levels, their stocks have not kept up with this trend.
This reflects that the current market panic has affected the stock market to a certain extent.
The shortage of chips is also one of the reasons for the huge loss in sales of automakers this year. Many companies reported that due to shipping congestion and port congestion, revenue fell sharply in the third quarter.
Wall Street reports mentioned earlier that Morgan Stanley strategist Michael Wilson believes that “at the same time, we also expect corporate profitability to be worse than expected.”
In the financial reports released by non-cyclical companies in the past month, a large number of companies have pointed out serious supply chain problems. After the release of the financial reports, the company’s future profit expectations and stock price expectations have been lowered.
Morgan Stanley analyst Adam Jonas also said in a report on Wednesday:
We believe that the third quarter may be the trough of US auto production, and suppliers may lower their performance guidance many times.
But production cuts are foreshadowed, so it is not surprising that investors bought when chip prices fell in the third quarter.
Telsey Advisory Group analyst Cristina Fernandez said that these factors will affect the profits of companies in the third quarter, and the impact on the next quarter, the holiday season, will be more significant.
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