Consensus expected rate of return
factor.formula
Consistent expected rate of return formula:
in:
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The stock target price released by the i-th institution reflects the institution's expectations of the future stock price.
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The stock closing price at the end of the month when the factors are calculated is used as the benchmark for the current stock price.
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The number of institutions that publish analysts' expected target prices, representing the number of analysts involved in the forecast.
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The consensus expected return represents the average expected return of all analysts' target prices relative to the current price.
factor.explanation
This factor calculates the average return of all analysts' target prices relative to the current stock price. The larger the absolute value, the greater the market's expectation of the stock's future price fluctuations. The sign of the consensus expected return (positive or negative) indicates the market's expected direction of the stock's future returns (up or down).
This factor should be noted in practice:
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Timeliness of target price: Analysts' target prices are usually time-limited. The release date and validity period of the target price should be considered, and recent target prices should be selected for calculation.
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Authority of institutions: The level and research quality of analysts in different institutions may vary. Different weights can be considered for target prices of different institutions.
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Coverage of target price: Insufficient coverage of stock target prices may lead to poor representativeness of consensus expected returns.
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Market sentiment impact: This factor is easily overly affected by market sentiment and needs to be combined with other fundamental factors for comprehensive analysis.