Earnings is fast approaching and sell-side firms around the globe are crunching numbers to help investors make sound investment decisions. Analysts are forecasting that Teekay Corporation (NYSE:TK) is going to report earnings of $0.07 per share. The actual numbers will be released when the company reports earnings on or around 2016-11-03.
Earnings can bring lots of surprises. In recent quarters Teekay Corporation recorded a surprise factor of 104.76% with an Earnings Per Share of $0.22. Investors look at the difference to see how far off the actual numbers were from the analysts’ predictions.
Wall Street Analyst: What Investors Need to Know
According to Zacks, the standard deviation for Teekay Corporation (NYSE:TK) was $1. Analysts predict a price target range from $7 to $9 with a consensus target from the 3 analysts providing projections currently stands at $8. The mean target was revised on 2016-09-06.
What’s the buzz on the Street?
Analysts make their predictions based on a whole bunch of factors – in the investment world this is known as the mosaic theory. The mosaic theory is a method used to gather information on a corporation – the information is gathered by collecting a combination of public and non-public material. Some public information includes the balance sheet and cash flow information from previous quarters. Non-public information might include a tip, which is illegal. Nonetheless, analysts use all the information they can get their hands on to make the best prediction possible.
Investors take analyst’s predictions very seriously – because analysts are the ones doing all the research. In fact, that’s exactly what investors pay an investment firm to do so that they can spend their free time doing things like fishing and spending time with family. But how can investors make a decision knowing that analysts can sometimes be overly optimistic? Investors can’t make decisions blindly, nor would they want to when they have a lot of money at stake. Investors must be careful if an analyst’s outlook is overly generous compared to previous quarters – this should send a red flag and raise questions like, does this analyst have a conflict of interest with this particular company?
More ways to make better investment decisions…
Let’s look at the ABR. For those who are new to investment lingo, ABR stands for the “Average Brokerage Recommendation” and it’s exactly what you think it means: it is the average of a collection of analyst’s recommendation on a particular stock. The average is based on a ranking system of 1 to 5, with 1 being a “strong buy” recommendation and 5 being a “strong sell” recommendation. Right now Teekay Corporation (NYSE:TK) has shares with an ABR of 3. The ABR is based on the recommendations of 3.
Don’t take our word for it – investors should use this article for informational purposes only and should not base investment decisions based on the information posted in this article.