Consensus recommendation

Consensus Recommendation

The mean or median recommendation that analysts make on a stock. The consensus recommendation is calculated simply by compiling recommendations and taking the average or median. Importantly, the consensus recommendation does not consider past accuracy or respect of the different analysts.

Consensus recommendation.

A consensus recommendation for an individual stock compiles ratings from a number of analysts who track that stock. The recommendation is expressed as either the mean or median of the separate recommendations.

Calculating the consensus is a multi-step process that involves grouping the terms that analysts use to recommend buying, selling, or holding, generally into three or five categories, assigning a scale, and computing the result either by averaging the numbers for the mean or identifying the median, which is the point at which half the views are higher and half are lower.

A consensus recommendation provides a snapshot of current thinking about a stock, so it can serve as a benchmark against which you can compare a single analyst's opinion to gauge how mainstream it is.

But like any statistical mean or median, a consensus recommendation can distort strong differences at either end of the scale. Further, if the report accompanying the consensus view doesn't point out significant differences in the viewpoints of the various analysts it includes, you won't be able to tell where the most respected analysts stand on the stock.

In addition, you should be aware that the consensus recommendation for any given stock might differ from one research company to the next. This is because the mathematical formula that assigns weights to the individual recommendations will vary, based in part on how many levels of differentiation the research company uses and how it interprets the words that analysts use to express their opinions.

References in periodicals archive ?
Reaffirming Pakistan's opposition to the Fissile Material Cut-off Treaty (FMCT), Ambassador Janjua called the establishment of a Group of Governmental Experts on the treaty an ill-conceived effort that failed to produce any consensus recommendation.
Only 27% of women during pregnancy and 25% at 3 months postpartum met the current European Union (EU) consensus recommendation for DHA.
The FDA s decision is based on the recently published consensus recommendation for diagnosis of pre-cancerous lesions of the cervix.
She said on a consensus recommendation of the committeea[euro]s Pakistani missions in Chile and Ireland have been closed besides rationalization in some other foreign missions.
The university counters that the group never reached a consensus recommendation and that officials were forced to start their own review and reorganization.
The second recommendation addresses the use of oral topical antimicrobials to prevent P31 in patients undergoing dental procedures, as no direct evidence indicates that the use of oral topical antimicrobials before dental procedures will prevent PM The third recommendation--the only consensus recommendation in the guideline--supports the maintenance of good oral hygiene.
The consensus recommendation is that the stock will outperform.
They find that the magnitude of analyst consensus recommendation changes is significantly associated with future returns.
Thus if a consensus recommendation of an ethics committee or commission can be construed as extending one or more of these principles to a novel, problematic situation, the authority of the justifying principle(s), based on an overlapping consensus in society as a whole, confers authority on the consensus of the smaller group.
Nasdaq:SCLN) today announced that its lead product ZADAXIN(R) was added to the Asian Pacific consensus recommendation for the treatment of patients infected with the hepatitis B virus (HBV).
Business community has been expecting the significant reduction in the interest rate as it is a consensus recommendation by the economists that monetary policy should be eased to control the adverse effects of the recession.
The Advisory Council-comprised of representatives from clinical and academic medicine; clinical spine research; and industry, including medical technology, health services and insurance organizations-will make a consensus recommendation to the Foundation's board of directors as to which topics should be included on the Collaborative Spine research agenda and thereby receive 80% of available grant support.