Author Topic: Stock prices and earnings expectations  (Read 888 times)

mutex

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Stock prices and earnings expectations
« on: July 20, 2005, 06:56:38 am »
So here's a frustrating thing:

Public companies release guidance for the coming quarter and year, and analysts independantly come up with their own estimates for what the stock should do, and often the two are very different.  When the company releases earnings and they are in-line with their guidance, but do not hit the analyst expectation, then the company is punished.

And even more crazy is the case where a company meets the higher analyst expectation, but the analysts were expecting the company to beat their expectations!

In both cases the stock is punished based on something the company can't control.  Am I crazy or is that wrong?