February 2025 reporting season is behind us. Of 175 companies we cover scheduled to report during the month, all but one (Star Entertainment) have announced. How did reporting season shake out?

To assess whether a reporting season exceeded, undershot, or met our expectations, we look at how our analysts changed fair value estimates. Our fair value estimate is a long-term valuation for a business, based on our discounted cash flow model. To estimate fair value, our analysts forecast a business’s future cash flows, discount these back to today, and then add them together.

If we increase our fair value estimate, the sum of all cash flows we expect the business to generate in the future, discounted to today, is greater now than before. Conversely, if we cut our fair value estimate, it generally indicates a business disappointed and now looks like it will generate less cash in the future.

What stands out is how ‘normal’ February looks, despite all the media noise and some wild swings in the market. We upgraded about a third of companies we cover – very close to the historical proportion – and a median upgrade of 4% is bang in line with recent years. At roughly 15%, downgrades accounted for a typical share of total results, and a median of 7% is about average.

Overall, things appear pretty typical. But drilling down to individual stocks, we made some material changes at both ends of the spectrum. Morningstar subscribers can read our full analysis, including our biggest upgrades and downgrades, using the links below.

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Morningstar Investor subscribers can access the full commentary here.