Alpha’s President, Mike Cummings participated on a panel discussion for NIRI Boston held in Newton, MA. The expert panel explored the current macro environment and the critical implication for strategic investor relations programs.

Evaluating your IR plan for 2024: Alpha’s Takeaway’s

 

Where has the growth gone?

  • Companies comprising the S&P 500 delivered revenue growth in 2023 of only 5% on average, as compared to 15% in 2022 and 11% in 2021. Perhaps more concerning is the outlook ahead which calls for very muted growth of 5% in 2024 and 5.8% in 2025.
  • Companies need to prepare for an economic slowdown. While the magnitude, timing, and effects of a soft landing versus a hard landing will vary by company and industry, preparation is essential.

Expect a market rotation from Growth to Value.

  • The Russell1000 Growth significantly outperformed Russell1000 Value more recently. However, historically Value stocks outperform Growth following periods of rate hikes and inflationary easing. We’d expect to see the same in the year ahead.
  • Those companies requiring a shift within their shareholder base need to have started that path with refined messaging and investor targeting in order to mitigate undue pressure and ensure sustained success.

Shareholder activism in North America is poised to snapback in 2024.

  • 2023 activism reached record levels globally, despite a slight pullback in North America after robust 2022.
  • There were over 180 different activists involved in campaigns in 2023. Most notable was the rise of “first time agitators” launching campaigns which reached a record number in 2023.

Refined, unified messaging across all strategic communications vertices.

  • Avoid the common pitfalls of disjointed communications across IR, PR, GA communications verticals.
  • Revisit and refine investor-focused messaging to address the shifting macro environment, with specific attention to understanding external sentiment and alignment with qualitative and quantitative financial objects – guidance and long-term targets.

Become more strategic in your Wall Street engagement planning and engagement.

  • Best-in-class IR programs develop and evolve an annual Strategic Engagement Plan, including specific KPIs and measurement tactics that draw from the many purpose-build data analytics tools.
  • Critical to planning, executing, and delivering on KPIs is alignment with management and the Board, with routine updates on IR program momentum quarterly.

Investor targeting front and center as growth slows.

  • Hopefully, your IR program has begun to build the “strong fit” pipeline of investor targets that align with your strategy and expected performance and avoid the common trap of a “rise and repeat” IR engagement annually.
  • Begin to understand the growing role of artificial intelligence (AI) in your IR program – is AI being used to analyze your management team’s tone and inflection at conferences, on earnings calls and in other public events? How are institutional investment managers using AI in their research and asset allocation functions? How can AI be incorporated into IR programs to help raise the bar and deliver high ROI programs?

Polish off those Activism and Crisis Plans

  • Activism will resurge in North America in 2024 after a slight breather in 2023. Activists large and small are taking aim at Boards on issues related to ESG, corporate strategies, and operations, and we’d expect a resurgence of M&A-related activity as corporate cost of capital begins to ease.
  • Concerningly, only approximately one-in-four public companies in N.A. have a activism plan in place today, leaving the door open to undue confusion, reputational damage, and long-lasting effects on investment brands from lack of preparation by public companies.

To learn more about Alpha’s Strategic Approach to addressing the growing complexities across the capital markets, please reach out to us today.