Information Content of Analysts' Stock Ratings and Earnings Forecasts in the Presence of Management Earnings Forecasts
AbstractThis paper evaluates the informativeness of analysts’ ratings and earnings forecast information contained in analyst reports beyond what is publicly provided by management earnings forecasts. Using only analyst reports that have been released practically simultaneously with management forecasts, I find that both analysts’ ratings and earnings forecasts have incremental information content conditional on management forecasts. Further analysis also reveals that analysts’ earnings forecasts are significantly more accurate than concurrently-announced management earnings forecasts. Overall, the findings in this paper present strong evidence that analysts offer informational value to the market beyond information that is provided by company management.
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Bibliographic InfoArticle provided by Research Institute for Economics & Business Administration, Kobe University in its journal The Japanese Accounting Review.
Volume (Year): 2 (2012)
Issue (Month): (December)
Analysts’ Roles in Financial Markets; Analysts' Stock Ratings; Analysts' Earnings Forecasts; Management Earnings Forecasts;
Find related papers by JEL classification:
- G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
- M41 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - Accounting
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