Beating an Elevated Bar
October 14, 2020
Sell-side analysts tend to lower estimates during a quarter, but Q3’20 was one of the rare instances when the opposite occurred. Over the last 15 years, there’s only been three other times when analysts have raised estimates during the quarter. In all other instances (93% of the time), analysts lowered S&P 500 company estimates by an average of -5.2%. During Q3’20, sell-side estimates increased by +4.1%, which helps explain the underwhelming immediate share price reaction from early consensus beats.