Corbin Perception, a leading investor research and investor relations (IR) advisory firm, today released its quarterly Industrial Sentiment Survey, which reveals green shoots in optimism after a period of neutrality and stabilization. The survey, part of Corbin’s Inside The Buy-side® publication, is based on responses from 37 investors and analysts globally who follow the Industrial sector.

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Word Cloud: Frequency Of Occurrence (Graphic: Business Wire)

Word Cloud: Frequency Of Occurrence (Graphic: Business Wire)

Findings are mixed to positive and several channel checks reveal a growing optimism following mixed 3Q16 results. Heading into 4Q16 earnings season, more than 60% expect earnings to be in line with consensus but, notably, the number predicting misses has dropped to the lowest level since the survey’s inception in September 2015. Industry professionals describe management tone as significantly more upbeat relative to the cautious tone employed in 2016. Meanwhile, 60% expect 2017 annual guidance to be higher than outlooks provided in 2016 and most compellingly, those asserting the Industrial sector is in a recession is only 30%, down dramatically from 69% in December 2015.

Multiple data points indicate increasing optimism toward the U.S. post-election, including 77% expecting the domestic economy to improve. Given the potential for a U.S. protectionist trade policy, 49% believe the Mexican economy will worsen, surging from only 13% last quarter, underscoring pre-election disbelief in the possibility of a Trump presidency.

“End markets are more dynamic. Together with a recovery in some of the oil infrastructure-related end markets should prove to be bullish for 2017,” commented a sell side analyst.

While green shoots of optimism are identified, notwithstanding a significant increase in the number of investors reporting they have been net buyers, 88% report valuations are fairly to overvalued.

“Investors are increasingly more positive on industrial orders, revenue and, to a lesser extent, EPS. While concerns exist regarding potential uncertainty and dollar strength as well as lofty valuations, there appears to be an urgency to deploy capital into cyclicals for fear of missing the window. As such, Industrials seem priced for perfection.” said Rebecca Corbin, Founder and Managing Partner of Corbin Perception. Corbin added, “This earnings season is pivotal and management outlooks should provide clarity on whether we are indeed turning the corner.”

The survey also identifies several significant shifts in end market views, as previously left-for-dead sectors stage a comeback. Materials return to favor, registering the most significant shift in positive sentiment this quarter, and are now in line with Building Products as most bullish. Despite an overall improvement across most subsectors, views on Auto continue to sag.

Since 2006, Corbin Perception has tracked investor sentiment on a quarterly basis. Inside The Buy-side® and other research on real-time investor sentiment, IR best practices and case studies are available at www.CorbinPerception.com.

About Corbin Perception

We are Corbin Perception, a leading investor research and investor relations advisory firm that specializes in shareholder value creation.

We leverage our broad company and industry experience, knowledge of best practices and benchmarking capabilities to provide research-driven counsel that enables our clients, publicly-traded companies across diverse industries, to positively differentiate their company in the market. We bring a unique perspective to our engagements, one that is based on a proven methodology and customized approach.

Our industry-leading research, Inside The Buy-side®, is covered by news affiliates globally and regularly featured on CNBC.

To learn more about us and our impact, visit our website at www.CorbinPerception.com. Access our research at www.CorbinPerception.com/research-portal/.