What is an Exante?
Ex-ante refers to any prediction made before an event or before market players are aware of relevant information. The exante analysis means estimation of earnings, for example, considers the expected success of all of a company’s business units, as well as individual goods in some circumstances. This also entails calculating cash uses like capital investments, dividends, and stock buybacks. Although none of these outcomes can be predicted with certainty, creating a prediction establishes a baseline against which reported actuals can be compared.
Consensus estimates, in particular, aid in the establishment of a corporate earnings baseline. When analysts’ expectations are far above or below their colleagues, it’s also feasible to determine which analysts in the group covering a certain stock are the most predictive.
This type of analysis considers potential cost savings from eliminating redundant processes, as well as revenue synergies from cross-selling.
While all forecasting is done in advance, some analysis is still done after an event has occurred. Following a merger, for example, there is frequently a lot of ambiguity about the underlying functioning of the company. The merger is the initial event, but the ex-ante analysis, in this case, produces estimates about the next big future event, such as when the merged firm reports earnings for the first time.