Earnings Skewness and Analyst Forecast Bias

2000 ◽  
Author(s):  
Zhaoyang Gu ◽  
Joanna Shuang Wu
Keyword(s):  
Analyst Forecast ◽  
Forecast Bias

First Impressions and Analyst Forecast Bias

2019 ◽  
Author(s):  
David A. Hirshleifer ◽  
Ben Lourie ◽  
Thomas Ruchti ◽  
Phong Truong
Keyword(s):  
First Impressions ◽  
Analyst Forecast ◽  
Forecast Bias

CEO Optimism and Analyst Forecast Bias

2014 ◽  
Vol 29 (3) ◽  
pp. 367-392 ◽  
Author(s):  
M. H. Franco Wong ◽  
X. Frank Zhang
Keyword(s):  
Analyst Forecast ◽  
Forecast Bias

scholarly journals Earnings Predictability And Broker-Analysts’ Earnings Forecast Bias

2017 ◽  
Vol 33 (6) ◽  
pp. 1285-1302
Author(s):  
Michael Eames ◽  
Steven Glover
Keyword(s):  
Private Information ◽  
Alternative Model ◽  
Analyst Forecast ◽  
Earnings Forecast ◽  
Earnings Expectations ◽  
Forecast Bias ◽  
Analyst Expectations ◽  
Earnings Predictability ◽  
Using Data ◽  
Short Horizon

Scholars have reasoned that analysts issue optimistic forecasts to improve their access to managers’ private information when earnings are unpredictable. While this requires a managerial preference for analyst forecast optimism, the observed walk-down of analyst expectations to beatable forecasts is consistent with a managerial preference for pessimism in short-horizon forecasts. Using data from various sample periods, alternative model specifications, and various measures of earnings unpredictability, we find that pessimism, not optimism, in short-horizon forecasts is associated with increasingly unpredictable earnings. Our results suggest that firms can more effectively manage analysts’ earnings expectations downward when earnings are relatively unpredictable.

scholarly journals Are Analysts Overoptimistic about the Prospects of Sin Firms?

2017 ◽  
Vol 8 (4) ◽  
pp. 99 ◽  
Author(s):  
Jin Zhang ◽  
Haeyoung Shin
Keyword(s):  
Stock Price ◽  
Forecast Accuracy ◽  
Earnings Forecasts ◽  
Positive Association ◽  
Negative Association ◽  
Analyst Forecast ◽  
Earnings Forecast ◽  
Absolute Value ◽  
Forecast Bias ◽  
The Difference

We investigate the association between the bias and accuracy of consensus analysts’ earnings forecasts and whether a firm is a sin firm or not. We measure analyst forecast bias as the difference between the consensus earnings forecast and the actual earnings, scaled by the stock price. We measure analyst forecast accuracy as the negative of the absolute value of the difference between the firms’ forecasted and actual earnings, scaled by the stock price. We find a positive association between the level of forecast optimism and sin firm membership. We find a negative association between the level of forecast accuracy and sin firm membership. Overall, these results imply that analysts tend to issue over-optimistic and less accurate earnings forecasts on sin firms.

scholarly journals Shareholder Protection And Forecast Bias

2011 ◽  
Vol 22 (2) ◽  
Author(s):  
Seung-Woog (Austin) Kwag
Keyword(s):  
Forecast Accuracy ◽  
Analyst Forecasts ◽  
Analyst Forecast ◽  
Font Size ◽  
Forecast Bias ◽  
Empirical Results ◽  
Shareholder Protection ◽  
Analyst Optimism

<p class="MsoNormal" style="text-justify: inter-ideograph; text-align: justify; margin: 0in 34.2pt 0pt 0.5in;"><span style="font-family: Times New Roman;"><span style="font-size: 10pt; mso-fareast-language: KO;">This research</span><span style="font-size: 10pt;"> </span><span style="font-size: 10pt; mso-fareast-language: KO;">explores whether</span><span style="font-size: 10pt;"> shareholder protection</span><span style="font-size: 10pt; mso-fareast-language: KO;"> influences analyst optimism and forecast accuracy in a global setting</span><span style="font-size: 10pt;">. The first set of </span><span style="font-size: 10pt; mso-fareast-language: KO;">empirical </span><span style="font-size: 10pt;">results suggests that</span><span style="font-size: 10pt; mso-fareast-language: KO;">,</span><span style="font-size: 10pt;"> as commonly observed in </span><span style="font-size: 10pt; mso-fareast-language: KO;">the </span><span style="font-size: 10pt;">existing </span><span style="font-size: 10pt; mso-fareast-language: KO;">domestic </span><span style="font-size: 10pt;">literature,</span><span style="font-size: 10pt; mso-fareast-language: KO;"> analyst optimism</span><span style="font-size: 10pt;"> </span><span style="font-size: 10pt; mso-fareast-language: KO;">characterizes </span><span style="font-size: 10pt;">analysts&rsquo; forecasts </span><span style="font-size: 10pt; mso-fareast-language: KO;">in the 19 sample countries</span><span style="font-size: 10pt;">. </span><span style="font-size: 10pt; mso-fareast-language: KO;">Further empirical results provide evidence that analyst forecasts issued in countries with strong shareholder protection laws are less optimistic and more accurate than analyst forecasts published in countries with weak protection laws. It is also observed that analyst forecast is superior to a na&iuml;ve model of no change in earnings. (JEL: G15, G18)</span></span></p>

Stock market openness and analyst forecast bias

2021 ◽  
pp. 106874
Author(s):  
Shenglan Chen ◽  
Bingxuan Lin ◽  
Rui Lu ◽  
Hui Ma
Keyword(s):  
Stock Market ◽  
Analyst Forecast ◽  
Forecast Bias

International Diversification and Forecast Optimism: The Effects of Reg FD

2008 ◽  
Vol 22 (2) ◽  
pp. 179-197 ◽  
Author(s):  
Donald R. Herrmann ◽  
Ole-Kristian Hope ◽  
Wayne B. Thomas
Keyword(s):  
Multinational Firms ◽  
Forecast Accuracy ◽  
International Diversification ◽  
Analyst Forecast ◽  
Full Sample ◽  
Forecast Bias ◽  
Fair Disclosure ◽  
Foreign Operations ◽  
Diversified Firms ◽  
Reg Fd

SYNOPSIS: Research shows that analysts following companies with a higher portion of foreign operations provide more optimistic forecasts, presumably to maintain favorable relations with management and thereby obtain improved access to information. We examine the effect of the introduction of Regulation Fair Disclosure (Reg FD) on analyst forecast bias for internationally diversified firms. We hypothesize that analysts’ incentives to issue optimistic forecasts for such firms should be reduced in the post-Reg FD era, because Reg FD prohibits firms from selectively disclosing management information to analysts. First, we demonstrate that average forecast bias decreases for our full sample of multinational firms. Second, we show that the positive relation between forecast optimism and international diversification significantly declines (and even disappears) in the post-Reg FD period. Reg FD appears to have been successful in reducing analysts’ optimistic bias and in reducing the effect of forecasting complexity on forecast bias for our sample of multinational firms. In a sensitivity test, we also find that the relation between international operations and forecast accuracy improves in the post-Reg FD period.

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