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Author | : Stan Beckers |
Publisher | : |
Total Pages | : |
Release | : 2004 |
Genre | : |
ISBN | : |
Download Bias in European Analysts' Earnings Forecasts Book in PDF, ePub and Kindle
Forecasting company earnings is a difficult and hazardous task. In an efficient market where analysts learn from past mistakes, there should be no persistent and systematic biases in consensus earnings accuracy. Previous research has already established how some (single) individual-company characteristics systematically influence forecast accuracy. So far, however, the effect on consensus earnings biases of a company's sector and country affiliation combined with a range of other fundamental characteristics has remained largely unexplored. Using data for 1993-2002, this article disentangles and quantifies for a broad universe of European stocks how the number of analysts following a stock, the dispersion of their forecasts, the volatility of earnings, the sector and country classification of the covered company, and its market capitalization influence the accuracy of the consensus earnings forecast.
Author | : Seung-Woog (Austin) Kwag |
Publisher | : |
Total Pages | : 39 |
Release | : 2003 |
Genre | : |
ISBN | : |
Download Bias in Analysts' Earnings Forecasts Book in PDF, ePub and Kindle
If either economic incentives or psychological phenomena cause the bias in analysts' forecasts to persist long enough, it would be potentially discoverable and exploitable by investors. quot;Exploitationquot; in this context implies that investors, through examination of historical forecasting performance, can more or less reliably estimate the direction and extent of bias, and impute unbiased estimates for themselves, given analysts' forecasts. The absence of persistence in forecast errors would suggest that analysts' own behavior ultimately quot;self-correctsquot; within a time frame that eliminates the possibility that the patterns could be exploited by investors. We use two look-back methods that capture salient features of analysts' past forecasting behavior to form quintile portfolios that describe the range of analysts' forecasting behavior. Parametric and nonparametric tests are performed to determine whether the two portfolio formation methods provide predictive power with respect to subsequent forecast errors. The findings support a conclusion that analysts' behaviors in both optimistic and pessimistic extremes do not entirely self-correct, leaving open the possibility that investors may find historical forecast errors useful in making inferences about current forecasts.
Author | : John Capstaff |
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Total Pages | : |
Release | : 2013 |
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Download A Comparative Analysis of Earnings Forecasts in Europe Book in PDF, ePub and Kindle
This paper examines the accuracy of European analysts' forecasts of corporate earnings. The analysis is based on a large sample of individual forecasts of annual earnings for years ending in 1987 to 1992. The bias and accuracy of the analysts' forecasts in each country are contrasted and the results show that forecasts of Dutch and, to a lesser extent, UK and German firms' earnings are relatively accurate, and that forecasts of Austrian and Scandinavian firms' earnings are particularly poor. An analysis of the full sample and selected country specific sub-samples provide results that are consistent with optimistic forecasting and over- reaction to recent information when making forecasts, that forecasts based on the firm's share price and the market wide price earnings ratio have incremental predictive value beyond that of the analysts' forecasts, and revisions of forecasts made by analysts show a systematic tendency to reduce previously forecasted changes.
Author | : Hakan Saraoglu |
Publisher | : |
Total Pages | : 318 |
Release | : 1996 |
Genre | : Business forecasting |
ISBN | : |
Download An Empirical Investigation of Bias in Analysts' Earnings Forecasts Book in PDF, ePub and Kindle
Author | : Louis Kuo Chi Chan |
Publisher | : |
Total Pages | : 34 |
Release | : 2003 |
Genre | : Econometrics |
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Download Analysts' Conflict of Interest and Biases in Earnings Forecasts Book in PDF, ePub and Kindle
Analysts' earnings forecasts are influenced by their desire to win investment banking clients. We hypothesize that the equity bull market of the 1990s, along with the boom in investment banking business, exacerbated analysts' conflict of interest and their incentives to adjust strategically forecasts to avoid earnings disappointments. We document shifts in the distribution of earnings surprises, the market's response to surprises and forecast revisions, and in the predictability of non-negative surprises. Further confirmation is based on subsamples where conflicts of interest are more pronounced, including growth stocks and stocks with consecutive non-negative surprises; however shifts are less notable in international markets
Author | : Takashi Yaekura |
Publisher | : |
Total Pages | : 37 |
Release | : 2001 |
Genre | : |
ISBN | : |
Download The Accuracy and Bias of Equity Values Inferred from Analysts' Earnings Forecasts Book in PDF, ePub and Kindle
We evaluate the extent to ...
Author | : Somnath Das (Saudagaran, Shahrokh M.) |
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Total Pages | : |
Release | : |
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ISBN | : |
Download Accuracy, Bias, and Dispersion in Analysts' Earnings Forecasts: the Case of Cross-listed Foreign Firms Book in PDF, ePub and Kindle
Author | : Lawrence D. Brown |
Publisher | : |
Total Pages | : 6 |
Release | : 2014 |
Genre | : |
ISBN | : |
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Author | : Louis K.C. Chan |
Publisher | : |
Total Pages | : 48 |
Release | : 2010 |
Genre | : |
ISBN | : |
Download Analysts' Conflict of Interest and Biases in Earnings Forecasts Book in PDF, ePub and Kindle
Analysts' earnings forecasts are influenced by their desire to win investment banking clients. We hypothesize that the equity bull market of the 1990s, along with the boom in investment banking business, exacerbated analysts' conflict of interest and their incentives to adjust strategically forecasts to avoid earnings disappointments. We document shifts in the distribution of earnings surprises, the market's response to surprises and forecast revisions, and in the predictability of non-negative surprises. Further confirmation is based on subsamples where conflicts of interest are more pronounced, including growth stocks and stocks with consecutive non-negative surprises; however shifts are less notable in international markets.
Author | : Ashiq Ali |
Publisher | : |
Total Pages | : 34 |
Release | : 2006 |
Genre | : |
ISBN | : |
Download Bias in Analysts' Earnings Forecasts as an Explanation for the Long-Run Underperformance of Stocks Following Equity Offerings Book in PDF, ePub and Kindle
For firms conducting initial or seasoned equity offerings, recent studies document that their stock returns are lower than those of non-issuers for about five years following the issue, and this underperformance is greater for small issuers. This study shows that analysts' earnings forecasts have greater optimistic bias for issuers than for non-issuers during the five year period. Moreover, the incremental optimistic bias is greater for small issuers. This result is consistent with the Loughran and Ritter (1995) conjecture that one of the reasons for the long-run underperformance of issuers' stocks is optimistic bias in the market's expectations of these firms' earnings.