Abstract

http://ssrn.com/abstract=2138898
 


 



Analysts' use of range information provided in management earnings forecasts.


Tyler K. Jensen


Iowa State University - Department of Accounting and Finance

Marlene Plumlee


University of Utah - School of Accounting

August 27, 2015


Abstract:     
This paper examines analyst responses to management forecasts issued as a range, a large and growing proportion of those forecasts. We find that information conveyed through the four parameters of the management forecasts - the upper and lower bounds, the width, and the midpoint - explains changes in consensus analysts’ forecasts and changes in the range of those forecasts for the current and future year. In addition, we provide initial evidence that information gleaned from each of these parameters is systematically related to reported earnings and that relying on this information improves analyst accuracy. In sum, we find that analysts react to information conveyed by all four parameters of a management range forecast and that these metrics are informative in large part because they provide information related to future reported earnings.

Number of Pages in PDF File: 53

Keywords: Management earnings forecasts, analyst range forecast accuracy

JEL Classification: G12, G14, M41


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Date posted: September 1, 2012  

Suggested Citation

Jensen, Tyler K. and Plumlee, Marlene, Analysts' use of range information provided in management earnings forecasts. (August 27, 2015). Available at SSRN: http://ssrn.com/abstract=2138898 or http://dx.doi.org/10.2139/ssrn.2138898

Contact Information

Tyler K. Jensen
Iowa State University - Department of Accounting and Finance ( email )
College of Business
Ames, IA 50011-2063
United States
Marlene A. Plumlee (Contact Author)
University of Utah - School of Accounting ( email )
1645 E Campus Center Dr
Salt Lake City, UT 84112-9303
United States
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