How accurate are stock market analysts? If you’re going to invest money in the stock market based on their forecasts, this is an important question.
As technology companies go, Microsoft is a pretty stable, predictable company, so I thought they’d make a good test of analysts’ accuracy. As the image shows, the analysts “hit” on their predictions/forecasts for Microsoft 47% of the time over one year, and 79% of the time over two years. It’s funny/interesting/curious that those numbers are the opposite of what I’d expect; I assumed they’d be more accurate over a shorter time frame.
Analysts were 88% and 93% for Walmart for the last two years; 33% and 40% for Exxon; only 13% and 20% for JC Penney; and just 13% and 23% for Apple.
The image and numbers come from fastgraphs.net.