What is the Est Rev: Up 5% Screen?
The Est Rev: Up 5% Screen collects every stock whose consensus earnings forecast has been raised by at least 5% over the past month, instead of ranking the biggest movers. It is the threshold cousin of the American Association of Individual Investors (AAII) upward-revision screens, run on the I/B/E/S consensus estimates inside Stock Investor Pro. Where a top-30 list keeps a fixed number of names no matter how strong the month's revisions were, this screen sets a fixed bar — 5% — and admits however many companies clear it. In a quarter of broad analyst optimism the list runs long; in a cautious market it thins out. The count itself becomes a read on how far the earnings mood has shifted.
The logic of a materiality threshold
Small revisions happen constantly and mean little. A forecast nudged from $2.00 to $2.02 sits inside the noise of analyst modeling. AAII draws the line at 5%, the point where an upgrade starts to say something real about the business, and the research behind the screen points the same way: it is revisions of roughly 5% or more, not trivial ones, that have been followed by above-average returns. Requiring the current-year (Y0) and next-year (Y1) consensus to each rise by that much also guards against a one-quarter blip — a company has to look better across two forecast horizons at once. The threshold does the work a ranking cannot, measuring the strength of the signal directly rather than grading each stock against its peers.
What the screen looks for
- Stocks traded over the counter (OTC) are excluded.
- More than four analysts cover the current fiscal year (Y0), so the consensus reflects a genuine group view rather than one voice.
- The latest Y0 consensus estimate is higher than it was a month ago, and the Y1 consensus is higher as well.
- At least one upward revision to the Y0 estimate in the past month, with no downward revisions.
- At least one upward revision to the Y1 estimate in the past month, with no downward revisions.
- The consensus estimate has been raised by 5% or more over the past month for both the current (Y0) and next (Y1) fiscal year — the threshold that defines this screen.
Why the 5% bar can work
Estimates move slowly and in steps. Analysts anchor to their last number and adjust only part of the way toward reality, so a large upgrade today tends to be followed by more of the same, and prices keep catching up for months. This delayed reaction — the estimate-revision version of the post-earnings-announcement drift first documented by Ball and Brown and later measured by Bernard and Thomas — is what makes a magnitude filter useful. A 5% cut-off skips the marginal tweaks and keeps revisions large enough to carry information about the next few quarters. Because the same names often surprise in the same direction again, a stock that clears the bar this month is a reasonable candidate to watch into its next report.
What to keep in mind
A percentage threshold is not immune to the tiny-base problem: 5% of a two-cent estimate is a rounding error dressed up as a signal, so weigh the dollar amount and the analyst count, not the percentage alone. A threshold list also swings in size with the cycle and can shrink to almost nothing near a market top, exactly when caution is warranted. And a rising forecast tells you the direction of expectations, not the price you pay for them — a stock can pass this screen and still look expensive against the very estimates that are climbing.
Sources
Ball, R., and Brown, P., "An Empirical Evaluation of Accounting Income Numbers," Journal of Accounting Research, 1968; Bernard, V., and Thomas, J., "Post-Earnings-Announcement Drift: Delayed Price Response or Risk Premium?" Journal of Accounting Research, 1989.
American Association of Individual Investors (AAII) — Stock Investor Pro screen definition and commentary.