Question

In your opinion, how is it possible for two different stock market experts, (having access to the same data and reports), to come up with two completely different opinions/forecasts on a Company's stock?

Answer 1

So, past data is the same with everybody. But it is the future, that stock market experts and analysts are trying to forecast in order to value a company. Analysts value companies based on there own assumptions and predictions of that company's future profitability and cash flows. And these assumptions can vary greatly from one analyst to another. For example, some analysts might feel that Apple is going to do great in the future, its sales are going to go up at say, 5% per year for the next 3 years, the next iPhone is going to be a great hit and so on. Another investor might not be so optimistic.

So, it is these assumptions and predictions about where the economy is going, what is going to happen to the industry and what kind of growth will a particular company show in the future; that create so much difference of opinion.