This is spot on Joachim … there are lots of pressures on analysts, one of them is from sales teams who want news flow that moves the market, or at least allows them to take trading share. And as we know, this is hard to find as the market is often (not always) efficient.
I hear you (being on the sell side). If you want to have a lot of client interaction, the simplest way to do it is to come up with extreme forecasts. Definitely much easier than to come up with creative and informative ways to analyse a company.
My favourite example over the last 12 months are these two forecasts by Citi on UK inflation. They are literally just six months apart:
This is spot on Joachim … there are lots of pressures on analysts, one of them is from sales teams who want news flow that moves the market, or at least allows them to take trading share. And as we know, this is hard to find as the market is often (not always) efficient.
I hear you (being on the sell side). If you want to have a lot of client interaction, the simplest way to do it is to come up with extreme forecasts. Definitely much easier than to come up with creative and informative ways to analyse a company.
My favourite example over the last 12 months are these two forecasts by Citi on UK inflation. They are literally just six months apart:
August 2022: https://www.reuters.com/world/uk/uk-inflation-hit-18-early-2023-citi-forecasts-2022-08-22/
February 2023: https://www.theguardian.com/business/2023/feb/22/uk-inflation-could-fall-below-2-citi-forecasts
NB: UK inflation peaked at 11.1% in October and has been declining since