Sell-side analysts: use at your own risk

A colleague recently forwarded me a McKinsey study that evaluated the quality of sell-side analyst earnings estimates.  I've always held the view that sell-side analysts provide excellent information on the companies they cover, but when it comes to insightful investment recommendations and/or useful price targets they're mediocre at best (this is a massive generalization, and there are some good analysts out there, but I think for the most part it's true).  So the results of this study were not that shocking to me (that analysts really aren't that good at predicting a company's future earnings), and I thought the chart below summarizes this finding well.