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Redrawing the line: Narrowly beating analyst forecasts and journalists’ co-coverage choices in earnings-related news articles

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  • Xia, Jingjing

Abstract

Do journalists use editorial tools to help investors clarify uncertain earnings performance? This study examines this question in the context of WSJ reporters’ co-coverage choices. Using narrowly beating consensus analyst forecasts as a proxy for earnings evaluation uncertainty, I find that journalists tend to co-cover peers that are more economically related to the announcing firm when it reported earnings that narrowly beat consensus analyst forecasts (“beaters”) than when discussing the earnings of non-beaters. Using intra-day data, I further find that stock investors appear to use the co-covered peers as a benchmark to evaluate the earnings of the beaters but not the earnings of the non-beaters. These findings highlight the usefulness of media’s editorial content to investors.

Suggested Citation

  • Xia, Jingjing, 2023. "Redrawing the line: Narrowly beating analyst forecasts and journalists’ co-coverage choices in earnings-related news articles," Journal of Contemporary Accounting and Economics, Elsevier, vol. 19(3).
    • Handle: RePEc:eee:jocaae:v:19:y:2023:i:3:s1815566923000267
    DOI: 10.1016/j.jcae.2023.100376
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    Keywords

    Financial media; Economically related firms; Earnings announcements; Benchmarks; Intraday returns;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G40 - Financial Economics - - Behavioral Finance - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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