Terrorist Attacks, Analyst Sentiment, and Earnings Forecasts

51 Pages Posted: 13 Dec 2015 Last revised: 13 Jan 2020

See all articles by Carina Cuculiza

Carina Cuculiza

Marquette University

Constantinos Antoniou

University of Warwick - Warwick Business School

Alok Kumar

University of Miami - Miami Herbert Business School

Anastasios Maligkris

University of Miami Herbert Business School

Date Written: June 5, 2019

Abstract

We examine whether exogenous and extremely negative events such as terrorist attacks and mass shootings influence the sentiment and forecasts of sell-side equity analysts. We find that analysts who are local to these attacks issue forecasts that are relatively more pessimistic than the consensus forecast. This effect is stronger when the analyst is closer to the event and located in a low-crime region. Impacted analysts are also relatively more pessimistic around the one- and two-year anniversaries of the attacks. Collectively, these findings indicate that exposure to extreme negative events affects the behavior of information intermediaries and the information dissemination process in financial markets.

Keywords: Analyst sentiment, forecast accuracy, extreme events, terrorist attacks

JEL Classification: G14, G40

Suggested Citation

Cuculiza, Carina and Antoniou, Constantinos and Kumar, Alok and Maligkris, Anastasios, Terrorist Attacks, Analyst Sentiment, and Earnings Forecasts (June 5, 2019). Available at SSRN: https://ssrn.com/abstract=2702051 or http://dx.doi.org/10.2139/ssrn.2702051

Carina Cuculiza (Contact Author)

Marquette University ( email )

P.O. Box 1881
Milwaukee, WI 53201-1881
United States

Constantinos Antoniou

University of Warwick - Warwick Business School ( email )

Coventry CV4 7AL
United Kingdom

Alok Kumar

University of Miami - Miami Herbert Business School ( email )

517B Jenkins Building
Department of Finance
Coral Gables, FL 33124-6552
United States
305-284-1882 (Phone)

HOME PAGE: http://moya.bus.miami.edu/~akumar

Anastasios Maligkris

University of Miami Herbert Business School ( email )

514 Jenkins Building
Department of Finance
Coral Gables, FL 33124
United States

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