A mean average of analysts’ opinions of the estimated or expected financial performance/ results of a company or its stock price (for a publicly traded company) in a future period. It is based on combination of consensus estimates collected from a group of third party analysts for a company’s performance or that of its stock over a specific time horizon. Analyst consensus is instrumental for identification of forecasts errors a management may commit, for example in estimating earnings per share (EPS) for a merger transaction, being the difference between its own forecast and actual results or “analyst consensus”, after accounting for the offer price per share for a given transaction.

Analyst consensus for a stock involves defining a course of action for investors or market participants as to their next move: either a strong buy, moderate buy, hold, moderate sell, or strong sell.