The Typical Trend of Earnings Estimates

Earlier this year, Thomson Reuters had an interesting research piece of how earnings estimates usually trend during the year. Here are the key bullet points:

Analysts tend to overestimate earnings initially, but subsequent downward revisions bring estimates closer to actual earnings.

During the calendar quarter, estimates typically continue to decline, driven in part by company issued guidance that is typically more negative than positive.

Positive surprises during earnings season tend to bring the blended earnings growth estimate back up to its actual value.

Read the whole thing.

Posted by on August 19th, 2013 at 12:14 pm


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