Analyst Pessimism and Forecast Timing

21 Pages Posted: 27 Jul 2013

See all articles by Orie E. Barron

Orie E. Barron

Pennsylvania State University

Donal Byard

City University of New York - Stan Ross Department of Accountancy

Lihong Liang

Syracuse University

Date Written: June/July 2013


In this study, we show that on average relatively pessimistic analysts tend to reveal their earnings forecasts later than other analysts. Further, we find this forecast timing effect explains a substantial proportion of the well-known decrease in consensus analyst forecast optimism over the forecast period prior to earnings announcements, which helps explain why analysts’ longer term earnings forecasts are more optimistically biased than their shorter term forecasts. We extend the theory of analyst self-selection regarding their coverage decisions to argue that analysts with a relatively pessimistic view – compared to other analysts – are more reluctant to issue their earnings forecasts, with the result that they tend to defer revealing their earnings forecasts until later in the forecasting period than other analysts.

Keywords: analysts’ forecast timing, analysts’ pessimism, trading commissions

Suggested Citation

Barron, Orie E. and Byard, Donal and Liang, Lihong, Analyst Pessimism and Forecast Timing (June/July 2013). Journal of Business Finance & Accounting, Vol. 40, Issue 5-6, pp. 719-739, 2013, Available at SSRN: or

Orie E. Barron (Contact Author)

Pennsylvania State University ( email )

University Park, PA 16802-3306
United States
814-863-3230 (Phone)
814-863-8393 (Fax)

Donal Byard

City University of New York - Stan Ross Department of Accountancy ( email )

One Bernard Baruch Way, Box B12-225
New York, NY 10010
United States
646-312-3187 (Phone)
646-312-3161 (Fax)

Lihong Liang

Syracuse University ( email )

900 S. Crouse Avenue
Syracuse, NY 13244-2130
United States

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