Reference no: EM132612952

Analyst Forecasts - Zacks

A sales forecast usually begins with a forecast of a firm's unit and dollar sales for some future period; and it is generally based on recent sales trends plus forecasts of the economic prospects for the nation, region, industry, and so forth. Analysts at investment research firms also make forecasts of companies' current and likely future financial performance. These analysts must piece together information that includes forecasts of the overall economy and the level and direction of interest rates. Moreover, they must examine economic and competitive conditions in specific industries right down to sales, costs, margins, profits, and cash flows for specific firms. In this cyberproblem, you will look at analysts' forecasts of earnings and recommendations about the investment potential of specific firms based on their forecasts of the firms' performance.

Question a. Sun Microsystems has enjoyed a dramatic increase in sales, earnings and stock price that have made many employees and investors in the company millionaires in a very short time. What were Sun Microsystem's actual earnings last quarter? Was there an earnings surprise? If so, what was it? What are the analysts' consensus estimates for the (a) current quarter, (b) current fiscal year, and (c) next fiscal year? What was the average broker recommendation for Sun Microsystems, and was there any change from the previous average recommendation? To answer this question, enter Sun Microsystems' stock symbol and request "All Reports". If you do not know Sun Microsystems' stock symbol, you can use Zack's "Ticker Lookup" function.

Question b. Access Sun Microsystem's company report as prepared by Zacks. What percentage of Sun Microsystems' shareholders are institutional investors and insiders? What was the stock's 52-week high and low? What was the stock's price change during the last year?

Question c. Access Sun Microsystems' "Annual Ratios & Turnover Rates" and comment on any recent trends that you observe in the company's different types of ratios (liquidity, asset management, debt management, and profitability ratios).

Question d. Examine analysts' predictions about future earnings and investment potential for software companies Oracle and Microsoft. How do analysts generate earnings predictions and make recommendations