Analyst Sentiment Scores
Aggregating the views of the street.
Sell-side analysts publish detailed reports with Buy/Sell/Hold ratings. Analyst Sentiment aggregates these ratings, but more importantly, it tracks the *rate of change* in upgrades vs. downgrades. A stock with a 'Hold' rating that is being upgraded is often more bullish than a stock with a 'Buy' rating that is stagnant.
The Consensus Curve
Quantitative funds track the 'Consensus Curve'. When an analyst's price target is significantly above the current price, it represents 'implied upside'. However, crowded consensus trades often underperform.
Key Takeaways
Rate of change in ratings matters more than the rating itself.
Analysts tend to herd; deviations from consensus are significant.
Analyst Sentiment Scores
Aggregating the views of the street.
Sell-side analysts publish detailed reports with Buy/Sell/Hold ratings. Analyst Sentiment aggregates these ratings, but more importantly, it tracks the *rate of change* in upgrades vs. downgrades. A stock with a 'Hold' rating that is being upgraded is often more bullish than a stock with a 'Buy' rating that is stagnant.
The Consensus Curve
Quantitative funds track the 'Consensus Curve'. When an analyst's price target is significantly above the current price, it represents 'implied upside'. However, crowded consensus trades often underperform.
Key Takeaways
Rate of change in ratings matters more than the rating itself.
Analysts tend to herd; deviations from consensus are significant.
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