Most market-data services compress analyst recommendations into a single consensus label. That makes comparison easy but removes information about the distribution underneath it.
GMR's proposed consensus-strength framework is designed to preserve that distribution and combine it with two additional dimensions: price-target dispersion and recent estimate direction.
Recommendation distribution
A stock with an overwhelming majority of positive ratings has a different analyst profile from one whose average only barely reaches Buy. The first layer of the framework therefore measures the share of positive, neutral and negative recommendations.
Brokerage-specific labels are normalised cautiously and the original wording remains visible wherever possible.
Dispersion and revisions
A strong recommendation distribution with extremely wide price targets can still indicate material uncertainty. Likewise, a positive consensus accompanied by falling EPS estimates can show that ratings have not yet caught up with the model changes.
Adding these dimensions makes the consensus more descriptive without pretending it can predict future returns.
What the score should not do
The framework is not intended to rank stocks as buys or sells. Analyst research is one input and can be wrong collectively as well as individually.
The purpose is to make consensus structure easier to compare across companies and over time, with every component visible to the reader.
| Component | What it measures |
|---|---|
| Recommendation distribution | Share of positive, neutral and negative ratings |
| Target dispersion | How far analysts disagree on valuation |
| Estimate revision direction | Whether forward expectations are rising or falling |
| Coverage depth | How many analysts contribute to the consensus |