The association between revisions of financial analysts' earnings forecasts and security-price changes

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.