Earnings Estimate

Earnings Estimate
An analyst's estimate for a company's future quarterly or annual earnings. Future earnings estimates are arguably the most important input when attempting to value a firm. By placing estimates on the earnings of a firm for certain periods (quarterly, annually, etc), analysts can then use cashflow analysis to approximate a fair value for a company, which in turn will give a target share price for publicly traded companies.

Analysts use forecasting models, management guidance and fundamental information on the company in order to derive an estimate. Market participants rely heavily on earnings estimates to gauge a company's performance when announcing quarterly or annual results. The analysts' earnings estimates are used as a benchmark to measure a firm's performance relative to how experts expected it would do.


Investment dictionary. . 2012.

Игры ⚽ Поможем решить контрольную работу

Look at other dictionaries:

  • earnings estimate — UK US noun [C] FINANCE ► a statement of the expected profits of a particular company over a particular period: »Analysts issue earnings estimates, giving earnings per share that the analyst believes a particular company will report in its next… …   Financial and business terms

  • earnings — noun ADJECTIVE ▪ high, record, strong ▪ low, meagre/meager ▪ average ▪ annual, hourly …   Collocations dictionary

  • estimate — ▪ I. estimate es‧ti‧mate 1 [ˈestmt] noun [countable] 1. a calculation of what the value, size, amount etc of something will probably be: • They were able to give us a rough estimate (= a not very exact one ) of the cost. • Even the most …   Financial and business terms

  • estimate — {{Roman}}I.{{/Roman}} noun ADJECTIVE ▪ official, unofficial ▪ current, recent ▪ Current estimates suggest that supplies will run out within six months. ▪ early …   Collocations dictionary

  • Earnings response coefficient — IntroductionThe earnings response coefficient, or ERC, is the estimated relationship between equity returns and the unexpected portion of (i.e., new information in) companies earnings announcements. In financial economics, arbitrage pricing… …   Wikipedia

  • Institutional Brokers' Estimate System — The Institutional Brokers Estimate System (I/B/E/S) is a service founded by the company I/B/E/S International Inc. which tallys available information about earnings forecasts made by investment analysts for publicly traded companies. I/B/E/S was… …   Wikipedia

  • Capitalization Of Earnings — A method of determining the value of an organization by calculating the net present value (NPV) of expected future profits or cash flows. The capitalization of earnings estimate is done by taking the entity s future earnings and… …   Investment dictionary

  • Owner Earnings Run Rate — An extrapolated estimate of an owner’s earnings (free cash flow) over a defined period of time (typically a year). This assumes that the firm s financial performance stays consistent throughout the period. Therefore, this estimate can be… …   Investment dictionary

  • Consensus Estimate — A figure based on the combined estimates of the analysts covering a public company. Generally, analysts give a consensus for a company s earnings per share and revenue; these figures are most often made for the quarter, fiscal year and next… …   Investment dictionary

  • Forward Price To Earnings - Forward P/E — A measure of the price to earnings ratio (P/E) using forecasted earnings for the P/E calculation. While the earnings used are just an estimate and are not as reliable as current earnings data, there is still benefit in estimated P/E analysis. The …   Investment dictionary

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”