Analyst Forecast Consistency
Hong Kong University of Science & Technology
January 20, 2012
Journal of Finance, Forthcoming
We show empirically that analysts who display more consistent forecast errors have greater ability to affect prices, and that this effect is larger than that of stated accuracy. These results lead to three implications. First, consistent analysts are less likely to be demoted and are more likely to be nominated All Star analysts. Second, analysts strategically deliver downward-biased forecasts to increase their consistency (if at the expense of stated accuracy). Finally, the benefits of consistency and of “lowballing” (accuracy) are increasing (decreasing) in institutional investors’ presence.
Number of Pages in PDF File: 44
Keywords: analyst forecast, consistency, Reg FD
JEL Classification: M4, G2Accepted Paper Series
Date posted: January 20, 2012
© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo8 in 0.391 seconds