Only one in five companies produce reliable forecasts, and investors respond to forecasting errors by shaving 6% off companies' share price, according to the latest global study commissioned from the Economist Intelligence Unit's survey by KPMG International.
Conversely, firms releasing forecasts which were accurate within 5% had their share price rose by about 46% over the past three years, compared with 34% of others. On average, company projections had been out by 13% over the past three years.
‘Those companies that do meet forecasting targets are high-performing companies able to make better decisions about their future,’ John Herhalt, practice leader, operations improvement, KPMG advisory services, told the Financial Post in Canada.
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