I think it is good to see where market expecations are.

The value of analyst forecasts is not their price targets but the qualitative insights in research report. In terms of consensus forecats I like seeing the view on each line item - you can see perhaps where you agree or disagree and help you get some comfort around the profitability of the business model. There are of course exceptions like the BNPL sector which I just disagreed entirely with the consensus forecasts so can see why some throw it out.

Like everything everyone is different, some say you should never talk to management/CEO or even do site tours etc.

There appears to be some research to back what @PinchOfSalt said about outliers. I’ve requested the full paper, but here is the abstract:

Abstract:

This study classifies analysts' earnings forecasts as "herding" or "bold" and finds that (1) boldness likelihood increases with the analyst's prior accuracy, brokerage size, and experience and declines with the number of industries the analyst follows, consistent with theory linking boldness with career concerns and ability; (2) bold forecasts are more accurate than herding forecasts; and (3) herding forecast revisions are more strongly associated with analysts' earnings forecast errors (actual earnings-forecast) than are bold forecast revisions. Thus, bold forecasts incorporate analysts' private information more completely and provide more relevant information to investors than herding forecasts. Copyright 2005 by The American Finance Association.”

https://www.researchgate.net/publication/4992700_Financial_Analyst_Characteristics_and_Herding_Behavior_in_Forecasting

I found more research (2021) that found lower accuracy from “herding” analysts compared to “bold” analysts. https://onlinelibrary.wiley.com/doi/full/10.1111/acfi.12820

“However, when we control for the segregated herding behaviour of analysts, we find that herding local forecasts are one of the least accurate compared to other herding forecasts. By contrast, bold local (that is, non-herding local) forecasts are more accurate than all other bold forecasts.”

I can’t remember where I read this but consensus analysts’ forward earnings expectations for any company are always too optimistic. This was a published bit of research, I believe

My take home from this, was that they may be helpful in direction but not in magnitude.

Broker reports were touched upon in the BabyGiants podcast today as part of a broader discussion of where to get unbiased company research from. It wasn’t pretty

i believe Claude is putting together an article on the subject which should be a useful reference.