Analysts' consensus forecast: A social construct
Abstract
While it is often asserted that “the financial markets think…”, the markets, a chain or network with unclear boundaries, remain difficult to grasp as a reality. This fleeting view is nonetheless materialised in an eminently tangible way in stock market prices, and also through the “analyst consensus”. Intended primarily for investors, the consensus provides an overview of the opinions issued by securities analysts in the form of figures. This objective of this paper is to analyse how this representation in figures fulfils a role as a “cognitive artefact” for the analysts themselves, and is part of the “management tools”. The dialectic of these tools is underlined, as the creation of the consensus results from interactions between actors, who "model" it, each in their own way. But once rolled out, the consensus produces a representation in itself, presenting objectivised characteristics and disciplining behaviours. As an information instrument, a benchmark, a standard, these “management tools” lead the analyst to pay attention to ‘what the market thinks”, “why it thinks so”, and also “what the analyst himself should think”.