An Improved Earnings Forecasting Model
34 Pages Posted: 29 Jun 2016
Date Written: April 2013
In this paper, we employ the earnings model developed in Ashton and Wang (2013) to forecast the one- to three-year ahead earnings of individual companies. We find that the model produces forecasts of future earnings that are less biased and more informative than both the consensus analysts’ earnings forecasts reported by IBES and the recently developed model-based forecasts of Hou, van Dijk and Zhang (2012).
Keywords: Earnings forecasts; Cross-sectional earnings model; Bias; Earnings
JEL Classification: G12, G29, M40, M41
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