Earnings Expectations and Interactive Discussions with Corporate Insiders

This study aims to empirically clarify the informational role of interactive discussions with corporate insiders by analyzing how participants’ expectations are affected by their participant comments during analyst and investor days. The results indicate that the tone of management presentations and responses to participants’ comments exhibit no impact on analysts’ expectations of company performance. By contrast, analysts’ earnings forecasts react significantly to comments from their peers (especially star analysts). Furthermore, peer comments contain additional information on analysts’ forecast errors. Finally, analysts whose earnings forecasts diverge positively (negatively) from the consensus are influenced by their peers' negative (positive) opinions. The results suggest that interactive meetings contribute in acquiring information and opinions from other participants (especially informed participants) rather than from corporate insiders.