Abstract
Using virtually all publicly available analyst earnings forecasts for a sample of 58 companies in the 1980-1986 period (over 23,000 individual forecasts by 100 analyst firms), our evidence indicates that individual analyst earnings forecasts are informative, even when they are preceded by earnings forecasts made by other analysts or by corporate accounting disclosures. However, our results indicate that analysts earnings forecasts contain only roughly 66% of the information reflected by security prices prior to the forecast-release date.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 341-363 |
| Number of pages | 23 |
| Journal | Journal of Accounting and Economics |
| Volume | 13 |
| Issue number | 4 |
| DOIs | |
| State | Published - Jan 1 1990 |
Funding
*Support of the Accounting Research Center of the J.L. Kellogg Graduate School of Management of Northwestern University and the Deloitte Touche Foundation is gratefully acknowledged. This research was completed while the first author was the KPMG Peat Marwick research fellow. Data on analyst earnings forecast revisions were kindly provided by Zacks Investment Research. We have greatly benefited from the numerous suggestions made by Ray Ball (the editor) and by Lawrence Brown, Lisa Gilbert, Ravi Jagannathan, S.P. Kothari, Robert Korajczyk, Robert Magee, Daniel Siegel, Konduru Sivaramakrishnan, Gregory Waymire, Ross Watts, Leonard Zacks, John Zbesko, Jerold Zimmerman, an anonymous referee, and seminar participants at Northwestern University, University of Chicago, University of Rochester, Columbia University, and MIT. ‘See Givoly and Lakonishok (1984) for a review of the literature.
ASJC Scopus subject areas
- Accounting
- Finance
- Economics and Econometrics