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About Estimate Research

Anybody familiar with should have discovered by now that...

Earnings estimate revisions are the most powerful force impacting stock prices

Len Zacks conclusively proved this point in 1979 with the publication of his groundbreaking article "EPS Forecasts - Accuracy Is Not Enough." He followed this discovery up with the creation of the Zacks Rank stock picking model which harnesses the power of earnings estimate revisions. Zacks #1 Rank stocks have produced a return nearly 3 times higher than the S&P 500 since 1988. Learn more about the Zacks Rank.

Once you discover the power of earnings estimate revisions it becomes nearly impossible to buy or sell a stock without first reviewing the current earnings estimate picture. There is no better place to do this research than the Estimates page on

Below we review each section of the Estimates research page so that you understand how best to interpret this information. For display purposes we have spliced in the sections from the Estimates page for Johnson & Johnson (JNJ) from June 2006.

Top Section- The Overview

Here you will find a quick snapshot of the basic earnings picture for any stock you are researching.

Current Year Estimate 3.68 Last Quarter EPS Surprise 0%
Next Year Estimate 4.01 Last Year's Earnings 3.50
Expected Earnings Growth 10.24% Forward Projected PE 15.89
Expected Sales Growth 9.83% ABR 2

Zacks Premium Research

If you are a Zacks Premium subscriber you will be entitled to see the current buy, sell, hold ratings on the company. That includes the Zacks Rank for short term trading and Zacks Recommendations for long term investing. You will also discover the Zacks Industry Rank and Rank in Industry to see how well it compares to its peers. Learn more about Zacks Premium.

Zacks Premium Research
Zacks Rank [?] 3
Zacks Recommendation [?] Hold
Zacks Target Price [?] 65
Zacks Industry Rank [?] 126 out of 217
Rank in Industry [?] 16 of 122

Earnings Growth Estimates

Stock prices generally reflect the future earnings prospects for the company. With that being the case, then you will definitely want to pay close attention to this section. Here you will find the growth estimates for a stock compared to the average stock in its industry and S&P 500. Value oriented investors will find this section especially helpful.

Earnings Growth Estimates
Current Qtr (06/2006) 4.40 N/A N/A
Next Qtr (09/2006) 7.10 N/A N/A
Current Year (06/2005) 5.20 1.00 0.00
Next Year (06/2006) 9.00 21.60 5.90
Past 5 Years 9.80 9.70 0.00
Next 5 Years 10.20 20.00 8.00
PE 17.30 11.10 15.70
PEG Ratio 1.60 1.00 2.00

Detailed Earnings Estimates

This goes a step beyond the Overview section to provide more detail on the earnings picture for the next two quarters as well as the current and next fiscal year.

Detailed Earnings Estimates
  Current Quarter
Next Quarter
Current Year
Next Year
Zacks Consensus Estimate 0.97 0.93 3.68 4.01
# of Estimates 18 17 19 18
Most Recent Consensus 1.00 0.96 3.60 3.93
High Estimate 1.00 0.96 3.73 4.08
Low Estimate 0.96 0.89 3.60 3.88
Year ago EPS 0.93 0.87 3.50 3.68
Year over Year Growth Est. 4.42% 7.1% 5.17% 9.03%

Very Important!

Most investors are basing their stock valuations on the metrics shown above this point. However, as you learn more about earnings estimates it will become clear that you can gain an advantage over the rest of the market by researching the earnings outlook in a better way. And that better way is displayed in the sections that follow below.

Agreement- Estimate Revisions

The Zacks Rank is based on 4 factors. Agreement is the first of those factors and many believe the most important. Agreement looks for the extent to which all brokerage analysts are revising their EPS estimates in the same direction. The more analysts that are revising estimates upward, the higher the Zacks Rank. As you will see with the JNJ example below, there is very little agreement on whether future earnings will be higher or lower. This creates a fairly neutral outlook and need to continue looking for clues in the sections below.

Agreement - Estimate Revisions
  Current Quarter
Next Quarter
Current Year
Next Year
Up Last 7 Days 0 0 0 0
Up Last 30 Days 0 0 1 1
Down Last 7 Days 0 1 1 1
Down Last 30 Days 0 1 1 1

Magnitude- Consensus Estimate Trend

Magnitude is another one of the four factors used to calculate the Zacks Rank. This is a great way to see the trend of earnings estimates over time. Steadily increasing earnings is what you want for your stocks. For larger caps, like JNJ, it is difficult to get massive increases in estimates. Flat to slightly upwards estimates are fine. Any sign of decrease in this section should seriously make you consider selling positions in the stock. Unfortunately that is a chink in JNJ's armor given the Magnitude picture in early June 2006 as estimates have been slowly eroding over the last 90 days.

The Zacks Rank concentrates on the difference between the Current estimates for this year and next versus the estimates from 60 days ago. The greater the percentage difference the greater the magnitude score.

Magnitude - Consensus Estimate Trend
  Current Quarter
Next Quarter
Current Year
Next Year
Current 0.97 0.93 3.68 4.01
7 Days Ago 0.97 0.93 3.68 4.02
30 Days Ago 0.97 0.93 3.68 4.01
60 Days Ago 0.97 0.94 3.70 4.06
90 Days Ago 0.97 0.93 3.71 4.05

Upside- Most Recent Consensus vs. Zacks Consensus

Few events can move a stock faster than an earnings surprise. One of the best ways to spot a potential earnings surprise before it happens is by checking its "Upside" potential (another of the four factors employed in the Zacks Rank). Upside looks for the difference between the most recent estimates and all estimates. What we call Upside is often dubbed as the "Whisper Number" by the media. Why is this a great indicator? The most recent estimates are almost always the most accurate. So if the most recent estimates are higher than the consensus estimate then it is a great sign that the stock may have a positive earnings surprise. And the reverse is true as well pointing towards an earnings disappointment.

Upside- Most Recent Consensus Vs. Zacks Consensus
  Current Quarter
Next Quarter
Current Year
Next Year
Most Recent Consensus (30 days) 0.97 0.94 3.71 4.07
Zacks Consensus Estimate 0.97 0.93 3.68 4.01
Upside Potential 0.00% 1.08% 0.82% 1.50%

Surprise- Reported Earnings History

Stocks that had positive earnings surprises in the recent past are more likely to have a positive surprise in the future. Just like Upside we want to own stocks that have the greatest potential to have positive surprises given that it usually leads to a rise in share prices. Just as important, companies that miss estimates in the past are more likely to repeat that negative feat in the future. These are generally the stocks to avoid. This element of Surprise is the 4th and final factor used in the Zacks Rank. The results from the most recent quarter are the most predictive of what will be reported in the next quarter.

Surprise - Reported Earnings History
  03/2006 12/2005 09/200 06/2005 Average Surprise
Reported 0.99 0.73 0.87 0.93  
Estimate 0.99 0.73 0.85 0.91  
Difference 0.00 0.00 0.02 0.02 0.02
Surprise 0.00% 0.00% +2.35% +2.20% +2.28%

Quarterly & Annual Estimates by Analyst

As the old saying goes "The devil is in the details". The same is true for researching the earnings picture for a stock. All of the information explained above is of value. However, most of these data points are averages that combine the expectations of many analysts. That is why it's so important to look at the individual estimate history to see the trend over time. There is no better way to see the direction and change in earnings estimates for your stocks than in the 2 tables below. Because this information is so valuable, we can only make it available to Zacks Premium customers.

You may wonder why the names of so many of the brokerage firms and analysts are displayed as "Not Identified". That is because many of the brokerage firms believe that the research they produce is their most valuable asset. Thus, they only allow us to show their estimates if we remove the name of the firm and analyst. Luckily there is little value in knowing which firm produced which estimate as it has little affect on the stock price. What's important is being able to see the flow of estimates which is clearly detailed below.

Quarterly Estimates by Analyst
  06/2006 09/2006
Date Brokerage Firm Analyst New Old New Old
June 02,2006 Zacks Investment Research Not Ident. 0.96 0.99 00.94 0.95
May 31,2006 Not Ident. Not Ident. 1.00 1.00 0.96 0.96
May 26,2006 Not Ident. Not Ident. 0.96 0.96 0.95 0.95
April 28,2006 Not Ident. Not Ident. 0.96 0.96 0.95 0.95
April 26,2006 Not Ident. Not Ident. 0.97 0.99 0.95 0.97
April 19,2006 Not Ident. Not Ident. 0.97 0.98 0.95 0.94
April 19,2006 Not Ident. Not Ident. 0.97 0.95 0.94 0.91
April 19,2006 JMP Securities Not Ident. 0.96 0.97 0.92 0.92
April 19,2006 Bear Stearns Companies, Inc. (The) Not Ident. 0.98 0.97 0.91 0.94
April 19,2006 Not Ident. Not Ident. 0.98 1.03 0.89 0.99
April 18,2006 Leerink Swann & Co. Not Ident. 0.98 1.00 0.93 0.92
Annual Estimates by Analyst
  12/2006 12/2007
Date Brokerage Firm Analyst New Old New Old
June 02,2006 Zacks Investment Research Not Ident. 3.69 3.72 4.07 4.12
May 31,2006 Not Ident. Not Ident. 3.60 3.60 3.93 3.93
May 26,2006 Not Ident. Not Ident. 3.67 3.67 4.00 4.00
April 19,-2006 Not Ident. Not Ident. 3.67 3.68 4.05 4.05
April 27,2006 First Global Not Ident. 3.70 3.69 3.88 3.91
April 26,2006 Not Ident. Not Ident. 3.69 3.67 4.02 4.00
April 19,2006 Not Ident. Not Ident. 3.68 3.81 3.98 4.19
April 19,2006 Not Ident. Not Ident. 3.68 3.66 3.94 4.05
April 19,2006 JMP Securities Not Ident. 3.67 3.71 3.98 4.07
April 19,2006 Bear Stearns Companies, Inc. (The) Not Ident. 3.68 3.68 4.03 4.02
April 19,2006 Not Ident. Not Ident. 3.70 3.83 4.03 4.20
April 18,2006 Not Ident. Not Ident. 3.67 3.66 3.90 3.90


If you know that earnings estimate revisions greatly affect stock prices, then you need to come to the Estimates page to fully research your stocks before placing future trades. By making this research step a habit you greatly increase your odds of buying winners early and selling losers before they destroy your portfolio.

Where to View the Estimates Pages?

The Estimates page is available on for all stocks covered by brokerage analysts. That is currently about 4400 of the largest stocks on the market. Why only those stocks? Because without estimates from brokerage analysts, then there is nothing reliable to present you on the subject.

Here is how to get to the Estimates pages in the future:

  1. Go to
  2. Enter ticker symbol in upper left hand corner and press "Go". This will take you to the quote page for the stock.
  3. Two ways to access estimates from the quote page
    1. Select "Estimates" in the drop down box with the research page choices
    2. Click "Company Reports" in the research navigation area. Then a sub-navigation menu will appear and from there you can select "Estimates".