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Summary: 81% of S&P 500 firms have met or beat analysts estimates through 1/24/06 (according to Reuters), while only 56% have met or beat investor expectations (according to WhisperNumber.com.)
| S&P 500 companies actual EPS against analysts estimates |
| Jan. 20 | Jan. 24 |
| Beat | 60% | 62% |
| Met | 19% | 18% |
| Missed | 21% | 20% |
| Reported | 100 | 131 |
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| S&P 500 companies actual EPS against investor expectations |
| Jan. 20 | Jan. 24 |
| Beat | 44% | 46% |
| Met | 8% | 10% |
| Missed | 48% | 44% |
| Reported | 48 | 81 |
According to CNBC, on average, 80% of all companies meet or beat analysts estimates for any given quarter.
According to WhisperNumber.com, 56% of all companies have met or beat individual investor estimates so far this quarter.
The perception that companies react in a positive manner or are 'rewarded' for beating analysts consensus estimates should have the markets flying high - after all, 80% of the S&P500 earnings so far have met or surpassed analyst estimates.
In reality, the market is reacting to investor expectations that have only been met or exceeded 56% of the time. Investor expectations have been missed more than twice as much as the analyst estimates.
It's not about the estimates, it's about the expectations.
WhisperNumber's Risk Sentiment Report
1/23/06: Will Sirius Satellite and Microsoft Top Earnings Expectations?
The majority of public companies like Sirius and Microsoft will top analysts estimates, but the real question is will they top individual investor expectations? Results of a recent study conclude investor estimates for quarterly earnings (whisper numbers) have a greater influence on stock movement than analysts consensus estimates, and this earnings season is proving to be no different.
1/17/06: 'Investor's Earnings Estimates Top Analysts in Returns, Impact on Stocks'
Results of new study conclude investor estimates for quarterly earnings (whisper numbers) provide greater returns when used as an investment vehicle, and have a greater impact on stock movement than analysts consensus estimates.
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