Revenue Forecasts as a Mechanism for Analyst Reputation Development

Marks, Joseph M.

doi:10.2139/ssrn.1095248

Cited by 7 publications

(12 citation statements)

References 19 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Variables are defined in the ''Appendix'' Analyst reputation and the issuance 45 result in superior analyst insights. The positive association is also consistent with Marks (2008), who contends that analysts disaggregate earnings to obtain access to management. While we cannot discern the direction of the causality from our analysis, the use of OP as a control variable helps to ensure that the manager-analyst interplay does not confound the interpretation of the results for the variables of interest.…”

Section: Tablesupporting

confidence: 82%

Analyst reputation and the issuance of disaggregated earnings forecasts to I/B/E/S

2009

View full text Add to dashboard Cite

Although sell-side analysts privately forecast revenues and expenses when producing earnings forecasts, not all analysts choose to provide I/B/E/S with earnings forecasts disaggregated into revenues and expenses. We investigate the role of reputation in explaining this decision. We find that analysts without established reputations are more likely than reputable analysts to issue disaggregated earnings forecasts to I/B/E/S, consistent with I/B/E/S exposure benefits accruing to analysts seeking to establish a reputation. Among less reputable analysts, those with high ability are more likely to disaggregate, consistent with this group reaping greater benefits from the exposure I/B/E/S provides. Additional tests support our primary hypotheses. Among less reputable analysts, those who disaggregate are more (less) likely to be promoted (demoted or terminated). The stock market responds similarly, with more weight assigned to earnings forecast revisions provided by analysts who disaggregate their earnings forecasts.

show abstract

Section: Tablesupporting

confidence: 82%

Analyst reputation and the issuance of disaggregated earnings forecasts to I/B/E/S

2009

View full text Add to dashboard Cite

show abstract

“…Only two studies have considered factors contributing to sell‐side analysts reporting a revenue forecast with their EPS forecast to I/B/E/S. Marks () and Ertimur et al. () focus on the role of analyst reputation and find that low reputation analysts are more likely than high reputation analysts to report revenue forecasts.…”

Section: Previous Literature and Hypothesis Developmentmentioning

confidence: 99%

“…Marks () and Ertimur et al. () argue that low reputation analysts report more revenue forecasts to build their personal reputations, while high reputation analysts refrain from reporting revenue forecasts to protect their reputations.…”

Section: Revenue and Expense Quality And Joint Eps And Revenue Forecamentioning

confidence: 99%

“…To date, only Ertimur et al. () and Marks () have examined the determinants of reporting a revenue forecast with an earnings forecast to I/B/E/S. Both studies find that lower reputation analysts are more likely to report revenue forecasts with their EPS forecasts to I/B/E/S.…”

Section: Introductionmentioning

confidence: 99%

“…Second, we add to the nascent literature that examines the analyst choice to complement an I/B/E/S reported earnings forecast with a revenue forecast. To date, only Ertimur et al (2011) and Marks (2008) have examined the determinants of reporting a revenue forecast with an earnings forecast to I/B/E/S. Both studies find that lower reputation analysts are more likely to report revenue forecasts with their EPS forecasts to I/B/E/S.…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Analyst revenue forecast reporting and the quality of revenues and expenses

Bilinski

Eames

2018

Business Fin & Account

View full text Add to dashboard Cite

We decompose earnings quality into revenue and expense quality and examine their associations with analyst propensity to supplement their earnings forecasts with revenue forecasts. Analysts report more revenue forecasts to I/B/E/S when expense quality is low to compensate for the low accuracy of their earnings estimates, which has a positive association with expense quality. Expense quality is unassociated with revenue forecast accuracy, thus revenue forecasts become increasingly useful for valuing firms when expense quality is low. Analysts report fewer revenue forecasts when revenue quality is low because both earnings and revenue forecast accuracy decline as revenue quality deteriorates. To control for endogeneity, we use firm‐fixed effects to control for unobserved time‐invariant heterogeneity across firms, instrumental variables regressions and regression in changes.

show abstract

Determinants of analysts’ revenue forecast accuracy

Lorenz

Homburg

2017

Rev Quant Finan Acc

View full text Add to dashboard Cite

Revenue Forecasts as a Mechanism for Analyst Reputation Development

Cited by 7 publications

References 19 publications

Analyst reputation and the issuance of disaggregated earnings forecasts to I/B/E/S

Analyst reputation and the issuance of disaggregated earnings forecasts to I/B/E/S

Analyst revenue forecast reporting and the quality of revenues and expenses

Determinants of analysts’ revenue forecast accuracy

Contact Info

Product

Resources

About