Extracting Information from European Analyst Forecasts
Journal of Asset Management, Vol. 8, No. 4, 2007
Posted: 1 Apr 2009
Date Written: December 31, 2007
The impact of analyst forecasts is undeniable. However, previous research on analyst factors, yield either event strategies that are unimplementable or earnings consensus strategies that are no longer effective. Building upon research contending that stocks with high dispersion of earnings yield lower subsequent returns, I examine earnings in conjunction with recommendations and price targets in the European market. Specifically, I test commonly used consensus and dispersion signals as well as a previously untested revision measure. My results suggest that investors designing an analyst trading strategy should look beyond earnings alone and include measures other than simple consensus.
Keywords: Earnings forecasts, Security analysts, Europe
JEL Classification: G14, G15
Suggested Citation: Suggested Citation