Analysts' weighted earnings revisions
factor.formula
1. Calculate the revision of each analyst firm’s last published net profit forecast within the past three months.
2. The adjustment range of a single forecast is defined as: the percentage change of the net profit forecast of this time compared with the latest net profit forecast of the same analyst for the same reporting period within 6 months before 1 month.
3. Use the Accwt2 method to weight the last forecast net profit adjustment of each analytical institution in the past three months to obtain the weighted earnings revision.
illustrate:
Traditional earnings revision measurement methods usually use the rate of change of consensus expected net profit, while this factor adopts a weighted approach, taking into account the heterogeneity of analysts' forecasts, and can more accurately capture changes in market expectations for earnings.
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The Accwt2 weighting method is a weighting method based on the analyst's forecast level. This weighting method may take into account factors such as the analyst's forecast accuracy, historical forecast deviation, and coverage to improve the reliability of the weighted average. The specific details of the Accwt2 weighting method need to refer to relevant documents or research.
factor.explanation
This factor is designed to capture the analyst's revision behavior on the company's earnings forecast and integrate the views of different analysts in a weighted manner. Traditional earnings revision measures usually directly use the rate of change in the consensus expected net profit, while this factor goes a step further by considering the differences in individual analysts' forecasts and weighting them according to the quality of analysts' forecasts, thereby more accurately reflecting the market's true view of changes in company earnings expectations. A high revision usually indicates a significant change in the market's view of the company's earnings prospects, which may have an impact on stock prices.