PortAnalyst Consensus — What Is It?
The average forecast for a company's earnings, prepared by analysts covering it.
Explanation
Consensus is the average of forecasts from multiple financial institutions—most often for earnings per share (EPS) and revenue for the upcoming quarter. In addition to the average, a range (the lowest and highest forecasts) is usually provided.
The range tells you more than just the average. A narrow range means analysts are in agreement, and an outcome outside this range would be a surprise. A wide range means no one really knows what to expect—and in such cases, the share price reaction can be volatile regardless of what the company reports.
The number of analysts also matters. A forecast based on two opinions is much less reliable than a consistent assessment from thirty.
Example
For a large tech company, the consensus EPS is 1.85 USD with a range of 1.78–1.94 and 34 analysts. An EPS of 1.60 USD would be significantly below the lowest forecast—the market typically punishes such readings severely.
Related Terms
See Analyst Consensus Live
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Portevo is not an investment advisor. The data and analyses are for informational and educational purposes only and do not constitute a recommendation or an offer to buy or sell financial instruments. Quotes are from external providers and may be delayed. You make investment decisions at your own risk.
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