Relative performance of four baskets since the beginning of 2020
200+ analysts: a deep dive on who's got cash, who may need it
We asked our analysts a series of questions on free cash flow generation, cash and potential equity needs if demand is as bad or worse than during the GFC. Combined with cost sensitivity and worst-case past revenue experiences, we also analysed GFC-style EBITDA scenarios for most stocks in our universe. Unsurprisingly, companies our analysts flagged as potentially at higher relative risks of equity raising, or struggling to generate free cash flow (FCF) in this scenario are among the worst performers in the sell-off.
In a GFC repeat EBITDA falls 27% but 63% of stocks likely generate positive FCF
If demand is as bad as the GFC, current cost flexibility suggests EBITDA drops by 27% in APAC, with Japan worse affected and Asia ex Japan and China less impacted. This is in line with our estimate EPS falling 25% in Asia ex Japan EPS this year. Our analysts expect almost 2/3 of companies can generate positive free cash flow in such a scenario.