Management Earnings Forecasts and Value of Analyst Forecast Revisions

Management Science, Forthcoming

45 Pages Posted: 31 Jan 2014 Last revised: 21 Feb 2014

See all articles by Yongtae Kim

Yongtae Kim

Santa Clara University - Leavey School of Business

Minsup Song

Sogang University

Date Written: January 29, 2014


This study examines the stock-price reactions to analyst forecast revisions around earnings announcements to test whether pre-announcement forecasts reflect analysts’ private information or piggybacking on confounding events and news. We find that management earnings forecasts influence the timing and precision of analyst forecasts. More importantly, evidence suggests that prior studies’ finding of weaker (stronger) stock-price responses to forecast revisions in the period immediately after (before) the prior-quarter earnings announcement disappears once management earnings forecasts are controlled for. To the extent that management earnings forecasts are public disclosures, our results suggest that the importance of analysts' information discovery role documented in prior studies is likely to be overstated.

Keywords: analyst forecasts, management earnings forecasts, public disclosure

JEL Classification: G14, G29, M40, M41

Suggested Citation

Kim, Yongtae and Song, Minsup, Management Earnings Forecasts and Value of Analyst Forecast Revisions (January 29, 2014). Management Science, Forthcoming. Available at SSRN: or

Yongtae Kim (Contact Author)

Santa Clara University - Leavey School of Business ( email )

500 El Camino Real
Santa Clara, CA California 95053
United States
(408) 554-4667 (Phone)
(408) 554-2331 (Fax)

Minsup Song

Sogang University ( email )

Palaus Hall 802, Sogang Business School
1 Shinsoo-Dong, Mapo-Gu
Korea, Republic of (South Korea)
82-2-705-8855 (Phone)

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