Consensus estimates

Financial analysis combines historical ratios derived from financial statements with forward-looking projections derived from financial forecasts. Forecast earnings available in the Infront Analytics platform are presented in the form of consensus estimates including the following information:

• Items: forecast earnings, target price, buy/sell recommendations.
• Depth: forecast data for the next 4 fiscal years, actuals for the last completed fiscal year, revisions for the last 10 years.
• Analytics: NTM estimates, forecast P/E, forecast dividend yield.

To view the consensus estimates for a company, select the Consensus Estimates menu option under Company Data.

How is the consensus calculated?

The consensus estimate is the aggregation of all the estimates of individual analysts covering the company. Depending on the level of coverage, this number could be the average of dozens of different forecasts, or just one or two analyst forecasts for smaller companies.

Estimates are calculated by our provider (FactSet) and updated on a weekly basis. The publication date is shown in the view title.

Descriptive statistics on the dispersion of the contributions are displayed when hovering your mouse over an estimate figure.

However, detailed estimates from each contributing broker are not available on the Infront Analytics platform.

Consensus analysis tips

Reviewing the number of analysts contributing to the consensus and the range of their estimates gives you an insight into the confidence level for a given forecast. A large range in estimates is a warning sign that there is a degree of uncertainty regarding the outlook for the industry in which the company operates, the company itself, or both. Likewise, if only a couple of analysts are covering a business, estimates must be used with caution.

It is also quite useful to look at the rate at which revenues, net income, and earnings per share (EPS) are likely to grow. Identify how growth rates evolve from one reporting period to the next one. In addition, look at how growth rates for each line item compare to the other two.