Loss Firms and Analysts' Earnings Forecast Errors
The Journal of Financial Statement Analysis, Vol. 1 No. 2
13 Pages Posted: 3 May 2014
Date Written: Winter 1996
An examination of analysts' accuracy in predicting annual earnings for firms reporting losses and firms reporting profits finds that analysts are ten times more accurate in predicting the earnings of profit firms. They have also improved their predictive ability for profit firms since the mid-1980s. The sample includes eighteen years of coverage by IBES and Compustat analysts.
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