Significant changes in mean and median analysts’ forecasts errors documented in recent studies are not synchronized across commercial forecast databases over time and are, in large part, a function of the definitions and procedures that determine the reported earnings component of earnings surprises. In this study we describe a number of complications researchers face in drawing inferences from...

Investors and other contributors to stock exchange need a variety of tools, measures, and information in order to make decisions. One of the most common tools and criteria of decision makers is price-to earnings per share ratio. As a result, investors are in pursuit of ways to have a better assessment and forecast of price and dividends and get the highest returns on their investment. Previous ...

This paper examines the relation between smooth past earnings performance and the credibility of voluntary management earnings forecasts. Specifically, using strings of increasing earnings per share as our measure of past performance, we demonstrate that both analyst forecast revisions and stock price reactions around management earnings forecasts are more pronounced when the firm has posted a ...

We carefully construct measures of earnings forecast accuracy and recommendation profitability that enable us to examine the association between the qualities of these two key outputs of individual security analysts. We find that analysts with superior earnings forecasts issue significantly more profitable recommendations than those with less accurate forecasts. The average annual recommendatio...

An important problem facing managers is how to enhance the credibility, or believability, of their earnings forecasts. In this paper, we experimentally test whether a characteristic of a management earnings forecast—namely, whether it is disaggregated—can affect its credibility. We also test whether disaggregation moderates the relation between managerial incentives and forecast credibility. Di...

Security analysts generally provide forecasts of earnings for the current period as well as oneyear ahead earnings at fiscal year end. In this study, we derive an estimation procedure, which infers forecast bias from equivalent price expressions that utilize different horizon earnings forecasts. It is well documented that analyst long-horizon earnings forecasts tend to be more optimistic (ex po...