Analysts earnings expectations this quarter are a joke with so many better than expected beats (>70%). Even though analysts are supposed to be separated from IB/trading desk it seems like they too often want to please their corporate paymasters. So, when analysts decide to make forecasts from company guidance do they intentionally lowball their numbers so it makes it much easier to beat and get a hoped for pop in the stock.
Ah yes, the invisible chinese wall. You play to help your team. Projections are only that. They are not meant to necessarily be accurate...they are more or less a joke. But I guess it would be a little strange not having any projections for any company in the world..
If you take some time and do several google searches you could find sites that track analysts... these go from actual GS, C, etc analysts all the way to picks by tv analysts which includes Jim Cramer. More than 50% analysts are wrong.. not with exact forecasts but whether a stock will go up or down. That's pretty striking to me. Analysts, like psychics, cannot predict the future. Otherwise they would drop their 200K job and TRADE if they were consistently right. They would make much more money if they were right! It's easy to have an opinion when none of your money is on the line... and who the hell cares about a investment bankers reputation these days.
Congrads on starting this thread. Its a sham and fraud whats going on. Take the 30 biggest co's in different sectors and go to yahoo finance and look at what est's were 120 days ago and what they were when earnings we're released and its mind boggling. EST'S 120 DAYS AGO ON 90% OF CO'S WHEN THE DOW WAS 6500 WERE ACTUALLY MORE THAN THE EST'S NOW. how the hell could that be. analysts actually lowered there est's huge as many stocks skied 2-5 times. thats a scam so all these co's could beat. so in reality we've had awful earnings but since all are beating its allowed wall street to hype the piss out of them. this will end in tears. next time we fall theres no coming back for a decade or 2 like japan.
I suspect that if you could do a well-done study comparing their forecasts to what actually happened, over a long enough period of time, they would turn out mostly a random walk down wall street...
Watch the Enron movie if you forgot about how manipulative the analysts are. P/E's according to GAAP accounting are absurd right now. Who wants to run the numbers? Analysts are so predictably horrible I want to start a Major Analysts Inverse ETF.
The Wall Street Journal had that dart throwing contest, and every year, the blind dart throwers, tossing darts at a full spread of the ticker symbols tacked against the wall beat the analysts in overall performance and returns..... ....every single year.