From Marketwatch: For a test case of Wall Street analysts’
perverse incentives, look no further than Apple Inc. After rising to giddy
heights, the stock has been unable to catch a break lately.
That is in no small part due to those incentives, which
cause bad news to get incorporated into stock prices only gradually. One
surprising consequence, according to researchers, is that unfavorable news
tends to come in waves rather than being randomly interspersed with good news.
Apple’s shares hit their all-time high of $705 on Sept. 21. At the time, the
consensus forecast for Apple’s fiscal 2013 earnings — among the more than four
dozen analysts tracked by FactSet — was $53.56 a share. That number has been
revised downward numerous times: By the end of last year, for example, it stood
at $49.08 — and currently is at $44.56...
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