Analyst Target Price Adjustment Momentum
factor.formula
The year-over-year increase in the weighted average of analysts’ target prices is calculated as follows:
in:
- :
The weighted average of the latest analyst target prices. Specifically, for each stock, we take the latest target prices given by all analysts covering the stock and weight them with certain weights (such as analyst ratings, historical forecast accuracy, etc.). This weight can be flexibly adjusted according to strategy requirements and is equal weighted by default.
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The weighted average of analyst target prices from the same period last year (corresponding to the current date). Calculated in the same way as the current weighted average to ensure a consistent benchmark for year-over-year comparisons.
factor.explanation
This factor measures the momentum of change in analyst target prices over the past year by calculating the difference between the current weighted average of the latest analyst target prices and the same period last year. A positive value indicates that analysts have overall raised their target prices for the stock, while a negative value indicates an overall reduction. The logic of this factor is that analysts' target price adjustments generally reflect changes in their expectations of the company's future prospects, and these changes may have an impact on stock prices in the short term. In particular, when analysts lower their target prices, it may trigger negative market sentiment and cause stock prices to fall, which is called the negative momentum effect of analyst target prices. Therefore, this factor can be used to capture the market's reaction to adjustments in analysts' expectations.