Why Do Analysts use a Zero Forecast for Other Comprehensive Income?

Accounting theory and accounting researchers stress the importance of clean surplus comprehensive income to corporate valuation. However, casual observation suggests that sell-side equity analysts routinely ignore other (OCI) in their forecasts instead focus on forecasting earnings (before OCI). Using a sample analyst reports, I first confirm normally omit OCI or from consistent with as zero. then predict find zero forecast for generally produces lower errors than alternative time-series models, such random walk AR(1) model, suggesting rational reason why take this approach. Finally, although analysts’ point future are usually zero, implied cost estimates positive variance OCI.