This comes from somewhere else...

The bottom line, in Kohler’s view, is that analyst profit forecasts are “virtually useless”.

Fund managers have known this for a long time, which is why they do their own forecasts. Broker research is more read for ideas and insights, and for subtle hints about companies that are written in code. But pity the poor retail investor who doesn’t understand the code and simply believes the profit forecasts and recommendations.

Amazingly, he adds, Ferraro and Ross say they don’t expect things to improve. “Our expectation is that sector analysts’ forecasts will continue to not accurately reflect deteriorating operating conditions for many companies.”

They conclude by suggesting that clients stick with analysts that have “long track records”, rather than their “less seasoned counterparts”. They don’t, however, mention the big salaries that analysts get to produce decent research for their firms’ clients, when in fact they are just managing their reputation risk and currying favour with corporate management.