Investor Mindset Does a Shift-and-Lift to ‘Cautious Optimism’ as Sentiment Recovers from Largest QoQ Pullback in a Decade; A Concerning Consumer in Focus for 2H25

• Both investor sentiment and observed executive tone rebound from last quarter’s tariff-induced retreat, with fewer than one-quarter each categorizing views as bearish
• While economic slowdown tops the list of unaided concerns, recession fears fade with 67% now expecting the U.S. economy to avoid a severe downturn; more, 47%, anticipate 2025 U.S. GDP to be Lower YoY, an improvement from last survey’s 64%
• 59% report seeing cost-cutting across companies under coverage, while 41% observe hiring freezes
• Most contributors expect Stable sequential performance for Q2 Revenue and EPS; at the same time, those expecting Operating Margin and FCF deterioration grow
• Companies are largely anticipated to Maintain annual guidance, particularly Revenue; still, nearly one-third expect EPS and Operating Margin outlooks to be lowered
• 56% believe we will see a resolution on tariffs sometime in 2025, while 55% report minimizing portfolio exposure to companies with known impact
• Debt Paydown remains the leading preferred use of free cash while support for incremental spend ebbs

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Corbin Advisors, a strategic consultancy accelerating value realization globally, today released its quarterly Earnings Primer^®, which captures trends in institutional investor sentiment. The survey, which marks the 63^rd issue of Inside The Buy-Side^® Earnings Primer^®, was conducted from June 3^rd to July 3^rd, 2025, and is based on responses from 69 institutional investors and sell-side analysts globally, representing ~$7.6 trillion in equity assets under management.

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Following last quarter’s survey which found the sharpest QoQ pullback in bullishness in a decade driven by acute tariff concerns, policy trepidation, and deteriorating growth forecasts, the Voice of Investor^® captured in this quarter’s survey reveals a shift toward cautious optimism, but with investors still wary of tariff impacts and consumer concerns.

To that end, half of investors surveyed characterize current sentiment as Neutral to Bullish or Bullish, up from just 24% in Q1’25 but not fully back to late-2024 ‘Trump Bump’ levels when overall bullishness registered 65%. Still, nearly one-quarter self-identify as Neutral to Bearish or Bearish, albeit down from the 40% observed last quarter. As for executives, more, 41%, describe leaders as Neutral to Bullish or Bullish, up from 29% QoQ but still well below the 72% captured in our Q4’24 survey.

Rebecca Corbin, Founder and CEO of Corbin Advisors, commented, “Following a period of radical uncertainty created by minute-by-minute tariff changes, investors have seemingly become desensitized to headline risk and are shrugging off in-flight and looming headwinds for now. Companies have become excellent at crisis management, deploying downcycle playbooks, with cost cutting the biggest defense strategy – originally to offset the slowing macro and now to mitigate tariffs – while communicating with high levels of transparency. While investors are sober about the U.S. consumer, with three-quarters expecting unemployment to worsen over the next six months, the added economic impact of ICE raids on the domestic workforce remains unknown. As we head into Q2 earnings season, companies continue to feast on robust backlogs but replenishment, in many cases, is not forthcoming. Further, evidence of pull-forward demand continues to grow. As executives prepare for Q2 earnings calls, investors are acutely focused on tariff impact, demand, specifically customer behavior and the state of the consumer, margins and pricing power, as well as capital priorities. Meanwhile, the markets have decoupled from the macro and are priced for perfection.”

With executives credited for effectively managing expectations, 39% expect Q2 earnings to be Better Than consensus, more than double the rate observed last survey, while an equal number forecast In Line results, compared with 53% in the prior quarter. Regarding Q2 KPIs, most expect Stable sequential performance for Revenue and EPS, though 31% still anticipate Worsening earnings (compared with 44% last quarter). At the same time, the share of those expecting deterioration in Operating Margins and FCF continues to grow.

Regarding annual guidance, most investors and analysts expect companies will Maintain 2025 outlooks across Revenue, EPS, Operating Margins, and FCF. Still, nearly one-third anticipate Lower EPS and Operating Margin guidance, at 31% and 30% respectively.

Kim Forrest, Founder and Chief Investment Officer at Bokeh Capital Partners, commented, “Companies want to make sure they have a low bar to step over, so they will not raise estimates given all of the uncertainty regarding tariffs.”

Amid improved sentiment, roughly two-thirds now expect the U.S. to avoid a recession, a sharp reversal from the tariff knee-jerk reaction captured in last quarter’s survey when nearly 6 in 10 were bracing for negative territory. Still, 47% expect 2025 U.S. GDP will come in Lower YoY, albeit an improvement versus 64% last quarter. Against this backdrop, investors are evenly split on prioritizing Growth or Margins, demonstrating a tale of two cities: maintaining prudent cost controls or strategically investing for growth.

Tariffs and Growth & Demand trends are identified as the primary focus areas for upcoming earnings calls, noted by 53% and 48% of participants, respectively. Consumer Behavior continues to move up the list of unaided concerns, noted by 29%, a 13-point increase QoQ. Meanwhile, the top concern identified this survey is Economic Slowdown, followed by Geopolitics at 46% while Inflation sees growing apprehension.

As for sector sentiment, Tech leapfrogs Healthcare to regain its spot as the most favored sector, jumping 29 points QoQ to 72%, its highest since September 2020. Meanwhile, Healthcare still ranks #2 among most bullish sectors despite a 20-point increase in bearish sentiment. On the other hand, Consumer Staples sees an influx of bears, up 21 points to its highest level on record, tied with Chemicals and Clean Energy as the most challenged sectors. Views toward Consumer Discretionary remain deeply negative, though bearishness recedes somewhat QoQ.

About Corbin Advisors

Since 2007, Corbin Advisors has tracked investor sentiment on a quarterly basis. Access Inside The Buy-Side^® and other industry-leading research on real-time investor sentiment and IR best practices at CorbinAdvisors.com.

Corbin is a leading investor research and strategic communications advisory firm accelerating value realization globally. We engage deeply with our clients — companies ranging from pre-IPO to over $700 billion in market cap across all sectors globally — to increase equity market value. We deliver research-based insights and execution excellence through a dedicated team of capital markets experts with deep sector and situational experience, a best practice approach, and an outperformance mindset. We have a long track record of delivering successful client outcomes, most notably by rerating and compounding equity valuations through our Voice of Investor^® research and counsel.

To learn more about us and our impact, visit CorbinAdvisors.com.

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"Following a period of radical uncertainty created by minute-by-minute tariff changes, investors have seemingly become desensitized to headline risk and are shrugging off in-flight and looming headwinds for now."