According to Interbrand research, brand strategy is the second most important consideration for analysts.
Interbrand, in partnership with NewtonX and Brodeur Partners, presented a report that reveals the link between the brand and the share price.
The study explored the valuation of S&P 500 companies and the investor community’s perceptions of the brand.
“This study is a watershed moment in redefining the role and value of the brand. Given that our study identified many companies underperforming, there is a strategic opportunity for companies to reevaluate their approach to brand strategy and customer communications.” investors, and gain a critical advantage in their valuation,” said Greg Silverman, Global Director of Brand Economics at Interbrand.
According to the analysis, 76% of investment analysts surveyed pointed out that brand strategy has a moderate to large impact on changes in price/earnings (P/E) ratios.
Another point raised is that, although the investment community values the brand, 90% of investment analysts say they do not have in-depth knowledge of the companies’ positioning and strategy.
The study also found that brand strategy is the second most important consideration (19.8%) for investment analysts and journalists when evaluating a company’s prospects, behind only financial forecasts, at 29.1%.
Furthermore, respondents stated that the brand was considered more impactful than competitive threats (18.6%), macroeconomic factors (17.9%) and the reputation of senior management (14.7%).
Methodology
The report “How the brand influences the price of shares” is a qualitative-quantitative study in two parts, and involved 241 professionals such as financial analysts, specialized journalists and investor relations professionals, to understand the perspective of the investment community on the strategy of the brand, the company’s evaluation and the way it stays informed.
