Changes in Analyst EPS Forecasts in the I/B/E/S Database

52 Pages Posted: 3 Jun 2016 Last revised: 23 Feb 2019

See all articles by Andrew C. Call

Andrew C. Call

Arizona State University (ASU) - School of Accountancy

Max Hewitt

University of Arizona - Eller College of Management

Jessica Watkins

University of Notre Dame

Teri Lombardi Yohn

Indiana University - Kelley School of Business - Department of Accounting

Date Written: February 16, 2019

Abstract

I/B/E/S is a common source of analyst forecast data, and the reliability of the data is important for practice and academic research. We compare analyst earnings forecasts across two versions of the I/B/E/S database, one available in 2009 and the other available in 2015. Examining both files over a common sample period, we find substantial differences in the observations in the I/B/E/S detail file over time. Further, the earnings forecasts in the later version are more accurate and less biased than those in the earlier version and identify substantially different firms as meeting or just beating analysts’ expectations. In contrast, the I/B/E/S summary file exhibits only modest differences over time. Finally, we examine two consensus earnings forecasts available to researchers at a given point in time, one calculated from the individual forecasts available in the detail file and the other obtained from the summary file. We document significant differences in the properties of these two consensus forecasts. Overall, we present important evidence of changes to the I/B/E/S detail file and provide guidance and suggestions to researchers relying on I/B/E/S data for analyst forecasts.

Keywords: I/B/E/S; Analysts; Earnings forecasts; Consensus; Market expectations

JEL Classification: M41

Suggested Citation

Call, Andrew C. and Hewitt, Max and Watkins, Jessica and Yohn, Teri Lombardi, Changes in Analyst EPS Forecasts in the I/B/E/S Database (February 16, 2019). Kelley School of Business Research Paper No. 16-46. Available at SSRN: https://ssrn.com/abstract=2788140 or http://dx.doi.org/10.2139/ssrn.2788140

Andrew C. Call

Arizona State University (ASU) - School of Accountancy ( email )

Tempe, AZ 85287
United States

Max Hewitt

University of Arizona - Eller College of Management ( email )

School of Accountancy
1130 E. Helen Street
Tucson, AZ 85721
United States
(520) 621-4805 (Phone)

Jessica Watkins

University of Notre Dame ( email )

384 Mendoza College of Business
Notre Dame, IN 46656
United States

Teri Lombardi Yohn (Contact Author)

Indiana University - Kelley School of Business - Department of Accounting ( email )

1309 E. 10th Street
Bloomington, IN 47405
United States
(812) 855-0430 (Phone)

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