Jul 142012

The Earnings Beat Probability is now 93%.  It has been changing only slightly in recent weeks.  This final week before the earnings announcement may hold more significant changes as analysts make their final adjustments to their earnings estimates.  At this stage in the quarter, the probability model is influenced by the consensus estimates themselves.  If analysts hike their estimates high enough, it will make it harder for Apple to beat those estimate, and therefore the probability of a beat will go down.

It’s all about sentiment, folks.  It’s less about what the actual earnings are, and more about by how much Apple beats the consensus estimates.  We don’t want to see analysts get over zealous with their estimates.

Stay tuned this final week, as analyst estimates may change daily.