What are IBES estimates?
IBES (also known as I/B/E/S) stands for Institutional Broker’s Estimate System, a database that was created by the Lynch, Jones and Ryan brokerage. This system basically compiles the analysis and forecasted future earnings of publicly traded companies. With the help of this database, users can see the different predictions (high, low and average) along with the forecasts of analysts. The IBES comes in very handy, especially when it comes to investment decisions as it provides valuable information of various investment options.
(Source: Thomson Reuters)
How does IBES work?
The Institutional Broker’s Estimate System first compiled its data for US companies in 1976. Based on the raw data available, the creators of the database managed to compute statistical time-series data for the constituent companies. This data was then used for by various financial journals to show how earnings estimates could lead to determining investment opportunities.
After compiling and determining yearly earnings estimates, the database expanded ranges further. Data series can now span closer to quarterly estimates of earnings. Additionally, the system continued to expand the constituent companies and now can display companies trading in international markets. In 1986, Lynch, Jones was purchased by Citigroup. In 1993, Barra purchased IBES and sold it to Primark after 2 years. In 2000, Thomson Financial bought Primark. Thus, the current owner of the IBES database is now Thomson Reuters.
To date, the Institutional Broker’s Estimate System system covers more than 40,000 companies in 70 markets. IBES provides a client base of 50,000 money managers and there are about 900 companies that are contributing data to the system. From the biggest global firms to local brokers, the database now provides comprehensive data for its users.
Depending on which type of data you need, the forecast database of IBES is available at either a summary level or detailed level. Data items are updated frequently throughout the day to give the user real time information. This allows analysts and portfolio managers to analyze the information of more than 40,000 equities all over the world.
As stated before, IBES has two versions. The summary history provides an overview of the key metrics for each company. The other version provides a detailed history, which contains a timeline of earnings forecasts by analysts.