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 ?
It also includes a consensus recommendation and target price for each asset class.
The budgeted revenue estimates for 2018-2019 are based on the State Funding Boards consensus recommendation of November 27, 2017 and adopted by the second session of the 110th General Assembly in May 2018.
The committee reviews all available health hazard data (see Figure 1) to derive a consensus recommendation that is based on die available data.
The draft consensus recommendation in this regard--a new recommendation since the last consensus report in 2015--differentiates between T2DM patients in whom ASCVD predominates and those in whom heart failure predominates.
in interest rate as it was a consensus recommendation by economists
PIAF Chairman Irfan Iqbal Sheikh, while issuing a statement alongwith senior vice chairman Tanveer Ahmed Sufi and vice chairman Shahzeb Akram, said the business community was expecting a reduction in interest rate as it was a consensus recommendation by economists that monetary policy should be eased to control adverse effects of recession.
PIAF Chairman Irfan Iqbal Sheikh, while issuing a statement along with senior vice chairman Tanveer Ahmed Sufi and vice chairman Shahzeb Akram, said the business community was expecting a reduction in interest rate as it was a consensus recommendation by economists that monetary policy should be eased to control adverse effects of recession.
PIAF Chairman Irfan Iqbal Sheikh, Senior Vice Chairman Tanveer Ahmed Sufi and Vice Chairman Shahzeb Akram said in a press statement issued here that the business community was expecting a reduction in interest rate as it was a consensus recommendation by economists that monetary policy should be eased to control adverse effects of recession.
One typical study conducted by Chen, Grancis and Schipper (2005) illustrated that the average analysts' consensus recommendation produces a price impact that is not significantly different from the average stock price movement.
Only 27% of women during pregnancy and 25% at 3 months postpartum met the current European Union (EU) consensus recommendation for DHA.
The medians equal 4 in the first nine sample years and 3 thereafter until the last sample year in which the median increases back to 4.16 I calculate relative recommendations, RELRECOMMEND, which is defined as the recommendation minus the consensus recommendation at the date of the recommendation.
However, on Friday Australian treasurer Joe Hockey announced his rejection of the transaction following failure by the country's Foreign Investment Review Board (FIRB) to reach a consensus recommendation.