<b>Information Content of Analysts' Stock Ratings and Earnings Forecasts in the Presence of Management Earnings Forecasts</b>

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Abstract

This paper evaluates the informativeness of analysts' ratings and earnings forecast information contained in analyst reports beyond what is publicly provided by management earnings forecasts. Using only analyst reports that have been released practically simultaneously with management forecasts, I find that both analysts' ratings and earnings forecasts have incremental information content conditional on management forecasts. Further analysis also reveals that analysts' earnings forecasts are significantly more accurate than concurrently-announced management earnings forecasts. Overall, the findings in this paper present strong evidence that analysts offer informational value to the market beyond information that is provided by company management.

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  • The Japanese Accounting Review

    The Japanese Accounting Review 2(2012), 87-116, 2012

    Research Institute for Economics & Business Administration - Kobe University

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