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Estimate revision

Analysts changing their forecasts after new information; the direction and breadth of revisions often matters more than the level of the estimate.

Revisions cluster and trend. A company whose estimates are being raised across most of its coverage tends to keep seeing raises, because analysts update incrementally rather than jumping straight to a new view.

For traders, revision breadth is the practical measure: the share of analysts moving up minus the share moving down. It changes the denominator of forward-pe even when the price stands still.

Example: nine of Northwind's eleven analysts raise next-year EPS within a fortnight of the guidance raise, lifting consensus from $0.98 to $1.05 and cutting the forward multiple from 26.5 to 24.8 times.

Related: consensus-estimate, forward-pe, guidance-raise, guidance-cut, whisper-number

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