Journal Article10.2139/SSRN.270200
Analyst Forecast Properties, Financial Distress, and Business Risk
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TL;DR: In this paper, the authors examined the validity of using analyst forecast properties to proxy for information quality and found that firms with losses, earnings declines, and volatile earnings have a strong tendency towards high dispersion and error.
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Abstract: This study examines the validity of using analyst forecast properties to proxy for information quality. The results suggest that dispersion and error measures are strongly related to financial distress and business risk. Firms with losses, earnings declines, and volatile earnings have a strong tendency towards high dispersion and error. Furthermore, forecast biases are predictable. Firms with low dispersion or error measures have relatively little forecast optimism, while firms with high dispersion or error measures have high amounts of forecast optimism. This finding is driven by loss firms, which tend to have greater dispersion and error. Caution should thus be employed when using dispersion and error measures to proxy for the quality of the information environment.
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Citations
Regulation Fair Disclosure, Analyst Following, and Analyst Forecast Dispersion
Afshad J. Irani,Irene Karamanou +1 more
TL;DR: In this article, the effect of Regulation Fair Disclosure (FD) on the quantity and quality of firm-specific information released to the market by comparing analyst forecast data from pre-FD to post-FD time periods is presented.
207
The Influence of Forecast Dispersion on the Incremental Explanatory Power of Earnings, Book Value, and Analyst Forecasts on Market Prices
Daniel M. Bryan,Samuel L. Tiras +1 more
TL;DR: The authors investigated the influence of analyst forecast dispersion on Ohlson's (2001) proposed linear information dynamics where consensus analyst forecasts are suggested as a proxy for other information and found that when analysts are confronted with high information asymmetry, they tend to focus less on accounting fundamentals and rely more on other non-accounting information, thus decreasing the correlation between the explanatory power of analyst forecasts and that of earnings and book value.
70
•Posted Content
International Differences in Analyst Forecast Properties
James S. Ang,Stephen J. Ciccone +1 more
TL;DR: The authors examined international differences in analyst forecast properties using 42 countries and found that country-specific and firm-specific components help determine dispersion and error, while the most important component, however, appears to be the discretionary component, as analyzed by profitability.
48
Analyst Forecasts and Stock Returns
James S. Ang,Stephen J. Ciccone +1 more
TL;DR: In this paper, the authors determine the relation between stock returns and analyst forecast properties, specifically, the dispersion and error of annual earnings forecasts, and show that firms with low dispersion or error outperform firms with high dispersion.
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Does Regulation Fair Disclosure affect analysts’ forecast performance? The case of restructuring firms
Beixin Lin,Rong Yang +1 more
TL;DR: In this article, the authors investigate how the enactment of Regulation Fair Disclosure (Reg. FD) influences analysts' forecast characteristics for restructuring firms and find that such an impact cannot be persistent with an increase in the relative magnitude of restructuring charges, the proxy for restructuring complexity.
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