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analysts predict that the company will have a drop in sales, and then the company releases third Quarter earnings to reflect analyst predictions? Such as the case with Intel, if on Tuesday they confirm the sales slump will their stock drop?

2006-10-15 08:36:41 · 4 answers · asked by ColdGhaze 1 in Business & Finance Investing

4 answers

The big money has already figured out the basic path of the company. That doesn't mean they are right. For instance one fund says a company will have a 10% increase in profits and another fund says the company will have a 15% in profits. The company earnings turn out to be 12%. Both funds have a model on where they think the price should be, based on that info. One fund will think the company is overbought and the other fund will think the company is underpriced.

A couple of years ago Amazon's earnings grew something like 25% in a quarter, but the stock price went down because enough money had projected Amazon of making even more money.

2006-10-15 09:33:49 · answer #1 · answered by gregory_dittman 7 · 1 0

Exactly what the previous answer said. If Wall Street is anticipating a drop in sales and it does happen, then nobody is dissappointed. The stock price may move up, but may not. It also depends on future forecasts, will the sales continue to drop in the future? then people may start selling. It is usually when Wall Street receives news that they didn't anticipate, such as analysts predicted growth, but actually there is a loss that occured.

2006-10-15 15:54:48 · answer #2 · answered by Anonymous · 1 0

Not if everyone is already expecting it, which I think they are. The stock might actually go up. Buy on the rumor, sell on the news is an old adage of Wall Street. In this particular case it would be just slightly different. Sell on the rumor, buy on the news.

2006-10-15 15:45:51 · answer #3 · answered by Anonymous · 1 0

Probably

2006-10-15 18:16:56 · answer #4 · answered by joescashmgt 1 · 0 0

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