Automating Peer Groups with Primer

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ICYMI

Check out the last few editions on using AI for investment analysis,* creating customized news feeds and tracking earnings call mentions:

• Analyzing Earnings Call Tone with AI

• Separating Facts from 'AI Nonsense'

• AI Due Diligence: AnalystAI

• Tracking Big Tech's AI Spending

• DeepSeek on Earnings Calls: From Zero to 100+ Mentions

• Demo: AI Agents in Market Analysis

• ChatGPT's Task Scheduling: Automated Market Analysis

• Effective Prompts For Investment Research

*Not investment advice

PEERS

Automating Peer Groups

Dividing companies into peer groups seems like it should be pretty easy. But there are some oddballs → Uber is an “industrial” company per the Global Industry Classification Standard, the industry benchmark, which was created by S&P back in 1999.

(One of the first companies I covered at Bloomberg News in the 2010s was S&P’s predecessor, conglomerate McGraw Hill, which funnily enough was classified as a media company because it owned BusinessWeek and other publications, though most of its profitability came from financial services).

Because of these weird classifications, analysts often create their own peer groups. With large language models, you can now make custom cohorts at scale.

Primer, a U.K.-based AI for equity research platform, recently used this ability to create an AI Disruption Report, which ranks 2,000 companies by their vulnerability to AI-driven market shifts.

Rather than treating businesses as monoliths, Primer evaluated each segment individually, determining which revenue streams are at risk and where AI-driven margin pressure is most likely to emerge. The report is based on multiple passes of AI analysis, using models like Claude 3.5 Sonnet and OpenAI o1 to assess how AI could impact different divisions within a company.

Companies in professional services dominate the AI risk rankings—firms like Cognizant and Accenture, which have built their businesses on high-touch knowledge work that AI is now automating. Customer service outsourcing giant Teleperformance also stands out, as AI-powered chatbots and voice assistants take over roles traditionally performed by human agents.

For more on how Primer did the analysis see their white paper here.

In the video below, Liam Rogan, Primer’s Head of Growth, and Ruggero Gargiulo, Head of Research, demo the platform to show earnings analysis in real time, such as flagging material changes.

When JD Sports reported earnings, the company told investors its guidance was “unchanged.” But Primer’s AI spotted a subtle tweak: the guidance now included a £25 million contribution from an acquisition that hadn’t been factored in previously. That meant the company was effectively lowering expectations for its core business.

“Seven out of eight sell-side brokers expected the stock to be flat or up,” Ruggero said. “But shares opened down 3% and closed the day down 10% as the market realized what had actually happened.”

Primer also identified a read-across effect when Interpublic reported weak results, triggering a delayed reaction in WPP’s stock. Interpublic’s earnings signaled broader softness in ad spending, a risk that extended beyond just one company. Primer flagged the update not only to clients following Interpublic but also to WPP investors who weren’t tracking the company directly.

“Some of our clients who weren’t even following Interpublic received the report anyway,” Ruggero said. “Primer recognized that the company’s outlook had worsened, which could have systemic effects on its peers. Sure enough, WPP initially held steady, then dropped 2% later in the day and kept falling in the following weeks.”

Current Primer users are from Allianz, Jefferies, Blackrock, Fidelity, North Rock, PMI, Panmure, among others. The platform covers 2,000 companies across the US, UK and EU. If you’re interested in Primer, check them out here.

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