What Factors Drive Analyst Forecasts?

Posted: 9 Aug 2011

See all articles by Boris Groysberg

Boris Groysberg

Harvard Business School

Paul M. Healy

Harvard Business School; National Bureau of Economic Research (NBER)

Nitin Nohria

Harvard Business School

George Serafeim

Harvard University - Harvard Business School

Date Written: August 9, 2011

Abstract

Using survey data to judge how analyst forecasts are related to evaluations of companies’ industry competitiveness, strategic choices, and internal capabilities, the authors found that analyst forecasts are associated with many of the factors that money managers rate as important in their assessments of analyst contributions. They also found wide variation in ratings consistency across variables among analysts covering the same company. On average, consistency is higher for sell-side analysts than for buy-side analysts.

Keywords: Equity Investments, Fundamental Analysis (Sector, Industry, Company) and the Valuation of Individual Equity Securities, Company Analysis, Portfolio Management, Economic Analysis and Capital Market Expectations, Macroeconomic Forecasts in Determining Asset Class/Security Return Expectations, Behavior

Suggested Citation

Groysberg, Boris and Healy, Paul M. and Nohria, Nitin and Serafeim, George, What Factors Drive Analyst Forecasts? (August 9, 2011). Financial Analysts Journal, Vol. 67, No. 4, 2011, Available at SSRN: https://ssrn.com/abstract=1907293

Boris Groysberg (Contact Author)

Harvard Business School ( email )

Soldiers Field
Boston, MA 02163
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617-496-2784 (Phone)
617-496-5271 (Fax)

Paul M. Healy

Harvard Business School ( email )

Soldiers Field
Boston, MA 02163
United States
617-495-1283 (Phone)
617-496-7387 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
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Nitin Nohria

Harvard Business School ( email )

Soldiers Field
Boston, MA 02163
United States
617-495-6653 (Phone)
617-496-7387 (Fax)

George Serafeim

Harvard University - Harvard Business School ( email )

381 Morgan Hall
Boston, MA 02163
United States

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