On Monday, we looked at a number of ASX 200 stocks that have been tipped to positively surprise during earnings season.
This time around, let's look at five stocks that Goldman Sachs thinks are candidates to disappoint when they release their results this month. They are as follows:
ARB Corporation Ltd (ASX: ARB)
The first ASX 200 stock that could fall short of expectations according to the broker is auto parts company ARB.
This is based on its belief that Australian growth may disappoint and costs could rise. It said:
We consider there to be downside risk to ARB's 1H25 result based on 1) revenue growth in Aus Aftermarket segment has historical shown a strong correlation with growth in light commercial vehicles (LCV) in Australia with FYTD25 LCV growth running at -12% as consumers pull back spending from the elevated sales levels experienced in 2023; 2) a step-up in employee numbers in July 2024, coupled with the reported increase in employee costs during 2H24, continue to highlight employee costs as a headwind while the industry remains in a structural labor shortfall; 3) recently acquired 4WP is expected to be loss making in 1H25 and detract from US earnings.
Beach Energy Ltd (ASX: BPT)
This energy producer is another ASX 200 stock that could negatively surprise this month. This is due to its Otway operation. It said:
We continue to see risk around Otway production impacted by customer offtake nominations which could present downside risk to our 20.1 mmboe FY25 production estimate.
Goldman also suspects that capital expenditures could be higher than expected. The broker adds:
We also see risk to higher growth capex than expected for the Offshore Gas Victoria project, currently forecasting A$640m gross remaining for the program to FY27 which could prove conservative.
Cochlear Ltd (ASX: COH)
Hearing solutions company Cochlear will be one to watch. Goldman thinks it could be losing market share. It said:
While the US Cochlear Implants (CI) market should continue demonstrating robust unit growth (~12% GSe), […] diluting this growth is ~150bps (GSe) of market share loss for COH with channel checks indicating positive industry feedback on Advanced Bionics (part of Sonova) remote programming capabilities.
Looking ahead, Goldman believes that Cochlear's full year net profit will be towards the bottom end of management's guidance ($410m-$430m) which is -4% below consensus estimates.
Flight Centre Travel Group Ltd (ASX: FLT)
Goldman thinks that this travel agent giant could deliver a result below expectations during the first half. It said:
GSe 4.5% below on 1H25e EBIT: Largely on Corporate given expectations of SME (~40% of Corporate TTV) pressure on spending and higher margin contribution. Lower airfares likely to have impact on both Corporate and Leisure super-overrides, impacting revenue margin.
TPG Telecom Ltd (ASX: TPG)
Finally, Goldman Sachs is feeling "cautious" about this ASX 200 stock ahead of its full year results release.
This is because it believes that TPG's "2H24 operating metrics will disappoint relative to market expectations – forecasting postpaid mobile sub declines of -13k, vs. VAe growth of +31k, and declining NBN earnings (given sub losses of -19k, and broadly flat margins)."
