Consensus forecast meaning

In practice, a consensus forecast is the simple average of published investment analysts’ estimates of a company’s financial performance, often used in takeover situations to indicate market expectations. Under the City Code on Takeovers and Mergers (UK Takeover Code), this is a defined concept used in Rule 28.7. Where an offeree company or a securities exchange offeror publishes analysts’ expectations, the “consensus forecast” means the arithmetic mean of all investment analysts’ forecasts that the offeree or such offeror has published. If the forecast concerns another party to the offer, see Rule 28.8. Key features and use: - Calculated as the arithmetic mean of the published set of analysts’ forecasts included by the relevant party. - Used to benchmark profit forecasts and related statements during an offer, supporting compliance with Rule 28 and helping ensure disclosures are fair, not misleading and capable of proper comparison. The UK Takeover Code applies across England & Wales, Scotland and Northern Ireland. In Ireland, the Irish Takeover Rules regulate profit forecasts and use of analysts’ estimates in a broadly similar way, although terminology and procedural requirements may differ. Practitioners should consult the applicable Panel rules and guidance.