Wall Street Analysts predictions

Posted on May 15, 2017

The skills the authors demonstrated here can be learned through taking Data Science with Machine Learning bootcamp with NYC Data Science Academy.

This study tries to evaluate how accurate Wall Street analysts' quarterly earnings projections are. Wall Street analysts try to guess what publicly listed companies will report for their earnings each quarter, and using CNBC's publicly available data, we try to evaluate their accuracy. Study has been based on 1st and 2nd quarter of 2017, and 4th quarter of 2016 earnings reports.

“Many analysts will incorporate top-down factors such as economic growth rates, currencies and other macroeconomic factors that influence corporate growth. They use market research reports to get a sense of underlying growth trends. To understand the dynamics of the individual companies they cover, really good analysts will speak to customers, suppliers and competitors. The companies themselves offer earnings guidance that analysts build into the models.”

-From Investopedia

As there are more analysts covering the company, there seems to be less earnings surprises.

It seems that analysts' quarterly earnings are quite accurate. The slope for the regression(beta1) comes out to be 0.96 or close to 1, and the intercept(beta0) is 0.00. R-squared is 0.72.

The implication for the accuracy of the analysts' earnings projection is that it will not be easy to take advantage of earnings surprises for profit, even with access to the actual earnings reported.

The result of this study shows that at least for earnings announcements in the most recent quarters it seems that the company's quarterly earnings are quite well reflected in Wall Street the analysts' earnings projections.

About Author

Daniel Rim

Daniel Rim has been working as Quant Analyst working to analyze undervalued equity investments in Emerging Markets. His educational background has been in fields such as mathematics,physics, and statistics. He has been immersing himself into the innovation and...
View all posts by Daniel Rim >

Related Articles

Leave a Comment

No comments found.

View Posts by Categories


Our Recent Popular Posts


View Posts by Tags

#python #trainwithnycdsa 2019 2020 Revenue 3-points agriculture air quality airbnb airline alcohol Alex Baransky algorithm alumni Alumni Interview Alumni Reviews Alumni Spotlight alumni story Alumnus ames dataset ames housing dataset apartment rent API Application artist aws bank loans beautiful soup Best Bootcamp Best Data Science 2019 Best Data Science Bootcamp Best Data Science Bootcamp 2020 Best Ranked Big Data Book Launch Book-Signing bootcamp Bootcamp Alumni Bootcamp Prep boston safety Bundles cake recipe California Cancer Research capstone car price Career Career Day citibike classic cars classpass clustering Coding Course Demo Course Report covid 19 credit credit card crime frequency crops D3.js data data analysis Data Analyst data analytics data for tripadvisor reviews data science Data Science Academy Data Science Bootcamp Data science jobs Data Science Reviews Data Scientist Data Scientist Jobs data visualization database Deep Learning Demo Day Discount disney dplyr drug data e-commerce economy employee employee burnout employer networking environment feature engineering Finance Financial Data Science fitness studio Flask flight delay gbm Get Hired ggplot2 googleVis Hadoop hallmark holiday movie happiness healthcare frauds higgs boson Hiring hiring partner events Hiring Partners hotels housing housing data housing predictions housing price hy-vee Income Industry Experts Injuries Instructor Blog Instructor Interview insurance italki Job Job Placement Jobs Jon Krohn JP Morgan Chase Kaggle Kickstarter las vegas airport lasso regression Lead Data Scienctist Lead Data Scientist leaflet league linear regression Logistic Regression machine learning Maps market matplotlib Medical Research Meet the team meetup methal health miami beach movie music Napoli NBA netflix Networking neural network Neural networks New Courses NHL nlp NYC NYC Data Science nyc data science academy NYC Open Data nyc property NYCDSA NYCDSA Alumni Online Online Bootcamp Online Training Open Data painter pandas Part-time performance phoenix pollutants Portfolio Development precision measurement prediction Prework Programming public safety PwC python Python Data Analysis python machine learning python scrapy python web scraping python webscraping Python Workshop R R Data Analysis R language R Programming R Shiny r studio R Visualization R Workshop R-bloggers random forest Ranking recommendation recommendation system regression Remote remote data science bootcamp Scrapy scrapy visualization seaborn seafood type Selenium sentiment analysis sentiment classification Shiny Shiny Dashboard Spark Special Special Summer Sports statistics streaming Student Interview Student Showcase SVM Switchup Tableau teachers team team performance TensorFlow Testimonial tf-idf Top Data Science Bootcamp Top manufacturing companies Transfers tweets twitter videos visualization wallstreet wallstreetbets web scraping Weekend Course What to expect whiskey whiskeyadvocate wildfire word cloud word2vec XGBoost yelp youtube trending ZORI