Analyst Sentiment In the Dumps
Friday, July 8, 2011 at 10:30AM One of the indicators we regularly track is the number of companies in the S&P 1500 seeing positive and negative EPS revisions in a given week. In the chart below we have calculated the number of consecutive weeks that the net earnings revisions ratio increased or decreased. Green bars indicate consecutive weeks where the revisions ratio increased, while red bars indicate streaks where the earnings revisions ratio decreased.
As shown in the chart, our net earnings revisions ratio has now decreased for 10 consecutive weeks. Going back to the end of 2007, this is the longest such streak of declining analyst sentiment that we have seen, even surpassing the nine week streak that we saw in the aftermath of the Lehman bankruptcy. Looking at this data, it is hard to argue that analysts are positive heading into this earnings season.
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