Management Earnings Forecasts and Value of Analyst Forecast Revisions

Kim, Yongtae; Song, Minsup

doi:10.1287/mnsc.2014.1920

Cited by 62 publications

(27 citation statements)

References 44 publications

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“…Altinkilic, Balashov, and Hansen (2013) find a similar result using intraday returns around earnings forecasts, the second and more sought-after analyst report. Chen, Francis, and Schipper (2005) and Kim and Song (2014) also find that price reactions to releases of analysts' reports are overstated in extant studies. In support, research shows that analysts have incentives to piggyback on other news because timeliness affects forecast accuracy (O'Brien 1988;Guttman 2010).…”

Section: Related Literaturementioning

confidence: 99%

Do Analysts Who Move Markets Have Better Careers?

Balashov

2018

J of Financial Research

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In this article I investigate the association between analysts’ ability to issue influential recommendations and their career outcomes. The fraction of recommendations that are defined as influential are linked to a higher probability of an analyst moving to a higher status brokerage house, and a lower probability of either being demoted to a lower status brokerage house or leaving the profession. Analysts who more often issue influential recommendations also have a higher chance of being ranked by Institutional Investor All‐America, having longer careers, and experiencing lower job turnover compared to peers.

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Section: Related Literaturementioning

confidence: 99%

Do Analysts Who Move Markets Have Better Careers?

Balashov

2018

J of Financial Research

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“…In robustness analyses, we use stock price at the beginning of the quarter to define price-deflated quarterly earnings forecast revision (Hope & Zhao, 2018). Moreover, we follow Kim and Song (2014) to define analyst forecast revision as the difference between the two consecutive EPS forecasts divided by the absolute value of the previous EPS forecast.…”

Section: Independent Variablementioning

confidence: 99%

Information Transfers from Peer Firms' Analyst Revisions.

Wu¹

2020

Preprint

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This study examines whether analyst revisions from peer firms have information transfer effects on focal firms in the same product industry. We find that the focal firm's stock returns are overall positively associated with peer firms' analyst revisions. This effect varies with firm-level rivalry: information transfers from non-rival (rival) peer firms' analyst revisions are positive (negative). Moreover, positive information transfers are much stronger for revisions from peer firms' common analysts, whose information also leads to increases in short-term return comovement between the focal firm and the peer firm. In addition, industry competition and a firm's industry position influence the magnitude of information transfers. However, the economic significance of information transfers on the focal firm is much smaller than peer firms' own market reaction.

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“…The EA literature has examined whether EA reports contain value-relevant information for pricing equity securities as opposed to serving as a marketing tool for their investment bank (e.g., Altinkilic and Hansen, 2009;Bradley et al, 2014;Li et al, 2015;Loh and Stulz, 2011;Mehran and Stulz, 2007). The empirical evidence has been mixed, with some papers arguing that the information content of EA reports has been overstated by the prior literature (e.g., Altinkilic and Hansen, 2009;Altinkilic et al, 2013;Kim and Song, 2015;Loh and Stulz, 2011). For example, Altinkilic and Hansen (2009) argue that prior studies have attributed the market impact of confounding news announcements to EA reports released on the same day.…”

Section: Sell-side Equity Analystsmentioning

confidence: 99%

“…The EA literature has produced mixed evidence on the extent to which sell-side analyst reports provide value-relevant information to capital markets. Several studies find significant market reactions to revisions in EA recommendations (e.g., Bradley et al, 2014;Li et al, 2015;Yezegel, 2015), yet other papers argue that the information content of EA reports has been overstated (e.g., Altinkilic and Hansen, 2009;Altinkilic et al, 2013;Kim and Song, 2015). For example, Altinkilic and Hansen (2009) argue that EAs piggyback on corporate news announcements and revisions in EAs' stock recommendations are "information-free" after controlling for these confounding events.…”

Section: Introductionmentioning

confidence: 99%

The Role of Debt Analyst Reports for Firms in Financial Distress

Gillette

2016

SSRN Journal

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I examine the role of sell-side debt analyst reports in the corporate bond market for financially distressed firms. Debt analysts are not subject to the same conflict-of-interest regulations as equity analysts, and for this reason it is an open question whether their primary function lies in reducing information asymmetry between investors and firm managers in public debt markets (i.e., information role) or in marketing their investment bank and underwriting clients (i.e., marketing role). I test whether debt analyst reports convey new information regarding changes in default risk and recovery rates. I find that debt analysts' bankruptcy and covenant violation predictions are incrementally informative to corporate bond investors, and I find that their reports are more informative for private equity firms (consistent with the information role). However, I also find that the majority of debt analyst reports (57.8%) piggyback on corporate news announcements (i.e., reiterate the information conveyed by other sources) and contain little new information, and the accuracy of the information in their reports is affected by investment banking conflicts of interest (consistent with the marketing role).

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Management Earnings Forecasts and Value of Analyst Forecast Revisions

Cited by 62 publications

References 44 publications

Do Analysts Who Move Markets Have Better Careers?

Do Analysts Who Move Markets Have Better Careers?

Information Transfers from Peer Firms' Analyst Revisions.

The Role of Debt Analyst Reports for Firms in Financial Distress

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