Tariff Refunds: What We‘ve Learned and What Comes Next

研报英文原文证据摘录

Tariff Refunds: What We‘ve Learned and What Comes Next

. Management specifically stated it

Getinge ~$36M received Reduction of COGS used the same accounting principle as the original tariff expense and did not classify the

benefit as an item affecting comparability (IAC).

LG Electronics Yes (amount undisclosed) One-time operating gain Managementprofitcharacterizedbut did notthediscloserefund theas aaccountingnon-recurringline gainitem contributingor amount. to operating

PepsiCo Yes (qualitative) Not separately disclosed Management indicatedrecognitionrefundstimingwouldor financialoffset tariffstatementcosts andclassification.inflation but did not disclose

Source: Company Data, Morgan Stanley Research

How did stocks respond to these disclosures? Were they positive catalysts or is

the market looking beyond them? The market reaction to tariff refunds does not

appear material nor broad-based. Across the companies that have disclosed tariff

refunds alongside earnings over the past three months, the market didn't appear to

put much, if any, incremental valuation premium on the tariff refunds given relative

performance post-earnings were relatively muted at +1-2%. Importantly, because

these disclosures were made alongside earnings releases, the observed stock

reactions reflect the market's assessment of the overall earnings report rather than

tariff refunds in isolation, making it difficult to attribute the full stock move to the

refund announcement itself. The strongest relative outperformance came from

Graco (+6.4%), while LG Electronics (+2.0%), Keysight (+1.7%) and McCormick

(+1.6%) also saw gains. By contrast, Getinge (+0.4%) and PepsiCo (-0.8%) saw little

incremental benefit, as investors largely looked through the one-time earnings

impact ( Exhibit 2 ).