What is Street Expectation?
The street expectation is the commonly-held estimate of a company's future performance by market analysts.
How Does Street Expectation Work?
Market analysts consider economic conditions, consumer sentiment, research and development, new products, competition, management efficiency and a whole host of other industry-specific factors to establish their expectation. A number of analyst estimates are then averaged to determine the overall street expectation.
These estimates are generally made every quarter or accounting period by securities dealers and analysts.
Why Does Street Expectation Matter?
The street expectation may adversely affect the price of the company's stock if its actual announced earnings fall below expectations. Conversely, a company that excedes expectations will often see its stock price increase.