抄録
The extant research indicates that analysts’ long-term earnings growth
forecasts are especially optimistic for past winners and have little predictive
power to distinguish between high-growth and low-growth firms. In
explaining the poor informational value of analysts’ long-term earnings
growth forecasts, studies have focused on the excessively aggressive forecasts
induced by analysts’ inflation of their true beliefs. This study reveals that the
forecasts’ poor informational value is driven by analysts’ reluctance to voice
conservative opinions rather than analysts’ inflation of their true beliefs.
We predict that this reluctance allows each firm’s conservative forecast
to be heavily influenced by the firm’s past performance and allows the
noisy predictors to distinguish high-growth firms from low-growth ones.
Consistent with our prediction, we find that each firm’s most conservative
forecasts are those most strongly influenced by past performance and have
the least predictive power.
forecasts are especially optimistic for past winners and have little predictive
power to distinguish between high-growth and low-growth firms. In
explaining the poor informational value of analysts’ long-term earnings
growth forecasts, studies have focused on the excessively aggressive forecasts
induced by analysts’ inflation of their true beliefs. This study reveals that the
forecasts’ poor informational value is driven by analysts’ reluctance to voice
conservative opinions rather than analysts’ inflation of their true beliefs.
We predict that this reluctance allows each firm’s conservative forecast
to be heavily influenced by the firm’s past performance and allows the
noisy predictors to distinguish high-growth firms from low-growth ones.
Consistent with our prediction, we find that each firm’s most conservative
forecasts are those most strongly influenced by past performance and have
the least predictive power.
| 本文言語 | 英語 |
|---|---|
| ページ（範囲） | 89-116 |
| ジャーナル | Advances in Quantitative Analysis of Finance and Accounting |
| 巻 | 12 |
| DOI | |
| 出版ステータス | 出版済み - 12月 2014 |