Analyst consensus target price implied yield
factor.formula
Analyst consensus target price implies yield:
This formula calculates the implied rate of return from analysts’ consensus target price, where:
- :
Analyst consensus target price usually refers to the average or median target price given by all analysts within a specific period of time. It represents the consensus expectations of market participants on future stock prices.
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The current stock price usually refers to the closing price of the current trading day or the most recent trading day. It reflects the market's assessment of the current value of the stock.
factor.explanation
The higher the implied yield of the analyst consensus target price, the higher the market's expectations for the stock's future earnings. A higher implied yield may mean that the stock is undervalued or that the market expects its fundamentals to improve positively. However, it should be noted that the analyst's target price itself is not a perfect prediction. It is affected by many factors, including the macroeconomic environment, industry development trends, the company's own fundamentals, and the analyst's subjective judgment and emotions. Therefore, the implied yield should be used in conjunction with other factors to obtain more accurate investment decisions.