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Consensus Estimate

Trading Term

In economics and investing, a consensus estimate refers to the average forecast of a company’s future earnings, revenue, or other financial metrics, as predicted by a group of analysts. These estimates are crucial for investors as they provide a benchmark against which a company’s actual performance can be measured. If a company reports earnings that exceed the consensus estimate, it is often seen as a positive indicator, potentially driving the stock price up. Conversely, if earnings fall short, it may lead to a decline in stock value. Consensus estimates help investors make informed decisions by providing a collective view of expected financial performance.

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