The Timing and Value of Forecast and Recommendation Revisions: Do Analysts Receive Early Peek at Good News?

49 Pages Posted: 5 Feb 2003

See all articles by Narasimhan Jegadeesh

Narasimhan Jegadeesh

Emory University - Department of Finance

Zoran Ivkovich

Michigan State University, Department of Finance

Date Written: November 2002

Abstract

This paper evaluates the information content of analysts' one-quarter ahead earnings forecast revisions and recommendation revisions at various points in time relative to earnings announcement dates. We conduct three sets of tests to evaluate the information content of revisions. Across all tests, we find that the revisions are least informative in the week after earnings announcements and that the information content of revisions generally increases over event time. We find a sharp increase in the information content of upward forecast revisions and recommendations upgrades, but we do not find a similar increase for downward revisions and recommendation downgrades.

Keywords: Financial markets, Brokerage analysts, Earnings forecasts, Analyst recommendations, Asymmetric and private information

JEL Classification: G14, D82, G24, G28

Suggested Citation

Jegadeesh, Narasimhan and Ivkovich, Zoran, The Timing and Value of Forecast and Recommendation Revisions: Do Analysts Receive Early Peek at Good News? (November 2002). AFA 2004 San Diego Meetings. Available at SSRN: https://ssrn.com/abstract=359320 or http://dx.doi.org/10.2139/ssrn.359320

Narasimhan Jegadeesh

Emory University - Department of Finance ( email )

Atlanta, GA 30322-2710
United States

Zoran Ivkovich (Contact Author)

Michigan State University, Department of Finance ( email )

315 Eppley Center
East Lansing, MI 48824-1122
United States

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