This survey reviews the literature on sell-side analysts’ forecasts and their implications for asset pricing. We review the literature on the supply and demand forces shaping analysts’ forecasting decisions as well as on the implications of the information they produce for both the cash flow and the discount rate components of security returns. Analysts’ forecasts bring prices in line with the expectations they embody, consistent with the notion that they contain information about future cash flows. However, analysts’ forecasts exhibit predictable biases, and the market appears to underreact to the information in forecasts and to not fully filter the biases in forecasts. Analysts’ forecasts are also helpful in estimating expected returns on securities, but evidence on the relation between analysts’ forecasts and expected returns is still scarce. We conclude by identifying unanswered questions and offering suggestions for future research.


Article metrics loading...

Loading full text...

Full text loading...


Literature Cited

  1. Abarbanell JS. 1991. Do analysts’ earnings forecasts incorporate information in prior stock price changes?. J. Account. Econ. 14:2147–65 [Google Scholar]
  2. Abarbanell JS, Bernard VL. 1992. Tests of analysts’ overreaction/underreaction to earnings information as an explanation for anomalous stock price behavior. J. Finance 47:31181–207 [Google Scholar]
  3. Admati AR. 1985. A noisy rational expectations equilibrium for multi-asset securities markets. Econometrica 53:3629–58 [Google Scholar]
  4. Agrawal A, Chadha S, Chen MA. 2006. Who is afraid of Reg FD? The behavior and performance of sell-side analysts following the SEC's Fair Disclosure rules. J. Bus. 79:62811–34 [Google Scholar]
  5. Agrawal A, Chen MA. 2008. Do analyst conflicts matter? Evidence from stock recommendations. J. Law Econ. 51:3503–37 [Google Scholar]
  6. Akins BK, Ng J, Verdi RS. 2012. Investor competition over information and the pricing of information asymmetry. Account. Rev. 87:135–58 [Google Scholar]
  7. Ali A, Klein A, Rosenfeld J. 1992. Analysts’ use of information about permanent and transitory earnings components in forecasting annual EPS. Account. Rev. 67:1183–98 [Google Scholar]
  8. Ang A, Hodrick RJ, Xing Y, Zhang X. 2006. The cross-section of volatility and expected returns. J. Finance 61:1259–99 [Google Scholar]
  9. Armstrong CS, Core JE, Taylor DJ, Verrecchia RE. 2011. When does information asymmetry affect the cost of capital. ? J. Account. Res. 49:11–40 [Google Scholar]
  10. Asquith P, Mikhail MB, Au AS. 2005. Information content of equity analyst reports. J. Financ. Econ. 75:2245–82 [Google Scholar]
  11. Avramov D, Chordia T, Jostova G, Philipov A. 2009. Dispersion in analysts’ earnings forecasts and credit rating. J. Financ. Econ. 91:183–101 [Google Scholar]
  12. Bailey W, Li H, Mao CX, Zhong R. 2003. Regulation Fair Disclosure and earnings information: market, analyst, and corporate responses. J. Finance 53:62487–514 [Google Scholar]
  13. Ball R, Brown P. 1968. An empirical evaluation of income numbers. J. Account. Res. 6:2159–78 [Google Scholar]
  14. Barber B, Lehavy R, McNichols M, Trueman B. 2001. Can investors profit from the prophets? Security analyst recommendations and stock returns. J. Finance 56:531–63 [Google Scholar]
  15. Barber BM, Lehavy R, McNichols M, Trueman B. 2006. Buys, holds, and sells: the distribution of investment banks’ stock ratings and the implications for the profitability of analysts’ recommendations. J. Account. Econ. 41:1–287–117 [Google Scholar]
  16. Barefield R, Comiskey E. 1975. The accuracy of analysts’ forecasts of earnings per share. J. Bus. Res. 3:3241–51 [Google Scholar]
  17. Barry CB, Brown SJ. 1984. Differential information and the small firm effect. J. Financ. Econ. 13:2283–94 [Google Scholar]
  18. Barth M, Kasznik R, McNichols M. 2001. Analyst coverage and intangible assets. J. Account. Res. 39:11–34 [Google Scholar]
  19. Bartov E, Givoly D, Hayn C. 2002. The rewards to meeting or beating earnings expectations. J. Account. Econ. 33:2173–204 [Google Scholar]
  20. Basu S. 1977. Investment performance of common stocks in relation to their price–earnings ratios: a test of the efficient market hypothesis. J. Finance 32:3663–82 [Google Scholar]
  21. Beyer A, Cohen DA, Lys TZ, Walther BR. 2010. The financial reporting environment: review of the recent literature. J. Account. Econ. 50:2296–343 [Google Scholar]
  22. Bhushan R. 1989. Firm characteristics and analyst following. J. Account. Econ. 11:2–3255–74 [Google Scholar]
  23. Boni L. 2006. Analyzing the analysts after the global settlement. Financial Gatekeepers: Can They Protect Investors? Y Fuchita, RE Litan 139–71 Baltimore, MD: Brookings Inst. Press [Google Scholar]
  24. Bonner SE, Hugon A, Walther BR. 2007. Investor reaction to celebrity analysts: the case of earnings forecast revisions. J. Account. Res. 45:3481–513 [Google Scholar]
  25. Bonner SE, Walther BR, Young SM. 2003. Sophistication-related differences in investors’ models of the relative accuracy of analysts’ forecast revisions. Account. Rev. 78:3679–706 [Google Scholar]
  26. Bradley DJ, Clarke J, Lee S, Ornthanalai C. 2014. Are analysts’ recommendations informative? Intraday evidence on the impact of time stamp delays. J. Finance 69:2645–73 [Google Scholar]
  27. Bradley DJ, Jordan BD, Ritter JR. 2003. The quiet period goes out with a bang. J. Finance 58:11–36 [Google Scholar]
  28. Bradshaw MT. 2011. Analysts’ forecasts: what do we know after decades of work? Work. Pap., Boston Coll. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1880339 [Google Scholar]
  29. Bradshaw MT, Richardson SA, Sloan RG. 2001. Do analysts and auditors use information in accruals?. J. Account. Res. 39:145–74 [Google Scholar]
  30. Brennan MJ, Subrahmanyam A. 1995. Investment analysis and price formation in securities markets. J. Financ. Econ. 38:3361–81 [Google Scholar]
  31. Brochet F, Miller GS, Srinivasan S. 2014. Do analysts follow managers who switch companies? An analysis of relationships in the capital markets. Account. Rev. 89:2451–82 [Google Scholar]
  32. Brown LD. 1993. Earnings forecasting research: its implications for capital markets research. Int. J. Forecast. 9:3295–320 [Google Scholar]
  33. Brown LD. 2001. A temporal analysis of earnings surprises: profits versus losses. J. Account. Res. 39:2221–41 [Google Scholar]
  34. Brown LD, Hagerman RL, Griffin PA, Zmijewski ME. 1987. Security analyst superiority relative to univariate time-series models in forecasting quarterly earnings. J. Account. Econ. 9:161–87 [Google Scholar]
  35. Brown LD, Mohd E. 2003. The predictive value of analyst characteristics. J. Account. Audit. Finance 18:4625–47 [Google Scholar]
  36. Brown LD, Rozeff M. 1978. The superiority of analyst forecasts as measures of expectations: evidence from earnings. J. Finance 33:11–16 [Google Scholar]
  37. Brown SJ. 1979. The effect of estimation risk on capital market equilibrium. J. Financ. Quant. Anal. 14:2215–20 [Google Scholar]
  38. Burgstahler D, Dichev I. 1997. Earnings management to avoid earnings decreases and losses. J. Account. Econ. 24:199–126 [Google Scholar]
  39. Bushee BJ, Matsumoto DA, Miller GS. 2004. Managerial and investor responses to disclosure regulation: the case of Reg FD and conference calls. Account. Rev. 79:3617–43 [Google Scholar]
  40. Chan LK, Jegadeesh N, Lakonishok J. 1996. Momentum strategies. J. Finance 51:61681–713 [Google Scholar]
  41. Chava S, Purnanandam A. 2010. Is default risk negatively related to stock returns. ? Rev. Financ. Stud. 23:62523–59 [Google Scholar]
  42. Chen S, Matsumoto DA. 2006. Favorable versus unfavorable recommendations: the impact on analyst access to management-provided information. J. Account. Res. 44:4657–89 [Google Scholar]
  43. Chen Z, Dhaliwal DS, Xie H. 2010. Regulation Fair Disclosure and the cost of equity capital. Rev. Account. Stud. 15:1106–44 [Google Scholar]
  44. Chiyachantana CN, Jiang CX, Taechapiroontong N, Wood RA. 2004. The impact of Regulation Fair Disclosure on information asymmetry and trading: an intraday analysis. Financ. Rev. 39:4549–77 [Google Scholar]
  45. Christophe SE, Ferri MG, Hsieh J. 2010. Informed trading before analyst downgrades: evidence from short sellers. J. Financ. Econ. 95:185–106 [Google Scholar]
  46. Chung KH, Elder J, Kim J-C. 2010. Corporate governance and liquidity. J. Financ. Quant. Anal. 45:2265–91 [Google Scholar]
  47. Clarke J, Khorana A, Patel A, Rau PR. 2007. The impact of all-star analyst job changes on their coverage choices and investment banking deal flow. J. Financ. Econ. 84:3713–37 [Google Scholar]
  48. Clarke JE, Khorana A, Patel A, Rau PR. 2011. Independents’ day? Analyst behavior surrounding the Global Settlement. Ann. Finance 7:4529–47 [Google Scholar]
  49. Clement MB. 1999. Analyst forecast accuracy: Do ability, resources, and portfolio complexity matter?. J. Account. Econ. 27:3285–303 [Google Scholar]
  50. Clement MB, Tse SY. 2003. Do investors respond to analysts’ forecast revisions as if forecast accuracy is all that matters?. Account. Rev. 78:1227–49 [Google Scholar]
  51. Cliff MT, Denis DJ. 2004. Do initial public offering firms purchase analyst coverage with underpricing?. J. Finance 59:62871–901 [Google Scholar]
  52. Cohen L, Frazzini A, Malloy C. 2010. Sell-side school ties. J. Finance 65:41409–37 [Google Scholar]
  53. Coles J, Loewenstein U. 1988. Equilibrium pricing and portfolio composition in the presence of uncertain parameters. J. Financ. Econ. 22:2279–303 [Google Scholar]
  54. Cornett MM, Tehranian H, Yalçin A. 2007. Regulation Fair Disclosure and the market's reaction to analyst investment recommendation changes. J. Bank. Financ. 31:3567–88 [Google Scholar]
  55. Cowen A, Groysberg B, Healy P. 2006. Which types of analyst firms are more optimistic?. J. Account. Econ. 41:1–2119–46 [Google Scholar]
  56. Das S, Levine CB, Sivaramakrishnan K. 1998. Earnings predictability and bias in analysts’ earnings forecasts. Account. Rev. 73:2277–94 [Google Scholar]
  57. De Franco G, Kothari SP, Verdi RS. 2011. The benefits of financial statement comparability. J. Account. Res. 49:4895–931 [Google Scholar]
  58. De Franco G, Vasvari FP, Wittenberg-Moerman R. 2009. The informational role of bond analysts. J. Account. Res. 47:51201–48 [Google Scholar]
  59. Dechow PM, Hutton AP, Sloan RG. 2000. The relation between analysts’ forecasts of long-term earnings growth and stock price performance following equity offerings. Contemp. Account. Res. 17:11–32 [Google Scholar]
  60. Dechow PM, Sloan RG. 1997. Returns to contrarian investment strategies: tests of naive expectations hypotheses. J. Financ. Econ. 43:13–27 [Google Scholar]
  61. Degeorge F, Patel J, Zeckhauser R. 1999. Earnings management to exceed thresholds. J. Bus. 72:11–33 [Google Scholar]
  62. Diether K, Malloy C, Scherbina A. 2002. Differences of opinion and the cross section of stock returns. J. Finance 57:52113–41 [Google Scholar]
  63. Dunbar C. 2000. Factors affecting investment bank initial public offering market share. J. Financ. Econ. 55:13–41 [Google Scholar]
  64. Eames MJ, Glover SM. 2003. Earnings predictability and the direction of analysts’ earnings forecast errors. Account. Rev. 78:3707–24 [Google Scholar]
  65. Easley D, O'Hara M. 2004. Information and the cost of capital. J. Finance 59:41553–83 [Google Scholar]
  66. Easley D, O'Hara M, Paperman J. 1998. Financial analysts and information based trade. J. Financ. Mark. 1:2175–201 [Google Scholar]
  67. Easton PD. 2004. PE ratios, PEG ratios, and estimating the implied expected rate of return on equity capital. Account. Rev. 79:173–95 [Google Scholar]
  68. Easton PD. 2009. Estimating the cost of capital implied by market prices and accounting data. Found. Trends Account. 2:241–364 [Google Scholar]
  69. Easton PD, Monahan S. 2005. An evaluation of accounting based measures of expected returns. Account. Rev. 80:2501–38 [Google Scholar]
  70. Easton PD, Sommers GA. 2007. Effect of analysts’ optimism on estimates of the expected rate of return implied by earnings forecasts. J. Account. Res. 45:5983–1015 [Google Scholar]
  71. Eleswarapu VR, Thompson R, Venkataraman K. 2004. The impact of Regulation Fair Disclosure: trading costs and information asymmetry. J. Financ. Quant. Anal. 39:2209–25 [Google Scholar]
  72. Elgers P, Murray D. 1992. The relative and complementary performance of analyst and security-price-based measures of expected earnings. J. Account. Econ. 15:2–3303–16 [Google Scholar]
  73. Elgers PT, Lo MH, Pfeiffer RJ. 2003. Analysts’ versus investors’ weightings of accruals in forecasting annual earnings. J. Account. Public Policy 22:3255–80 [Google Scholar]
  74. Elton EJ, Gruber MJ. 1972. Earnings estimates and the accuracy of expectational data. Manag. Sci. 18:8409–24 [Google Scholar]
  75. Elton EJ, Gruber MJ, Gultekin M. 1981. Expectations and share prices. Manag. Sci. 27:9975–87 [Google Scholar]
  76. Fama EF. 1970. Efficient capital markets: a review of theory and empirical work. J. Finance 25:2383–417 [Google Scholar]
  77. Fama EF, French K. 1992. The cross-section of expected stock returns. J. Finance 47:2427–65 [Google Scholar]
  78. Francis J, Philbrick D. 1993. Analysts’ decisions as products of a multi-task environment. J. Account. Res. 31:2216–30 [Google Scholar]
  79. Frankel R, Kothari SP, Weber J. 2006. Determinants of the informativeness of analyst research. J. Account. Econ. 41:1–229–54 [Google Scholar]
  80. Frankel R, Lee CMC. 1998. Accounting valuation, market expectation, and cross-sectional stock returns. J. Account. Econ. 25:3283–319 [Google Scholar]
  81. Fried D, Givoly D. 1982. Financial analysts’ forecasts of earnings: a better surrogate for market expectations. J. Account. Econ. 4:285–107 [Google Scholar]
  82. Gebhardt WR, Lee CMC, Swaminathan B. 2001. Toward an implied cost of capital. J. Account. Res. 39:1135–76 [Google Scholar]
  83. Gintschel A, Markov S. 2004. The effectiveness of Regulation FD. J. Account. Econ. 37:3293–314 [Google Scholar]
  84. Givoly D, Lakonishok J. 1979. The information content of financial analysts’ forecasts of earnings. J. Account. Econ. 1:3165–85 [Google Scholar]
  85. Givoly D, Lakonishok J. 1980. Financial analysts’ forecast of earnings: the value to investors. J. Bank. Finance 4:3221–33 [Google Scholar]
  86. Givoly D, Lakonishok J. 1984. Properties of analysts’ forecasts of earnings: a review and analysis of the research. J. Account. Lit. 3:1117–52 [Google Scholar]
  87. Gleason CA, Lee CMC. 2003. Analyst forecast revisions and market price discovery. Account. Rev. 78:1193–225 [Google Scholar]
  88. Gomes A, Gorton G, Madureira L. 2007. SEC Regulation Fair Disclosure, information, and the cost of capital. J. Corp. Financ. 13:2–3300–34 [Google Scholar]
  89. Graham JR, Harvey CR, Rajgopal S. 2005. The economic implications of corporate financial reporting. J. Account. Econ. 40:3–73 [Google Scholar]
  90. Griffin P. 1976. Competitive information in the stock market: an empirical study of earnings, dividends, and analysts’ forecasts. J. Finance 31:2631–50 [Google Scholar]
  91. Grossman SJ, Stiglitz J. 1980. On the impossibility of informationally efficient markets. Am. Econ. Rev. 70:3393–408 [Google Scholar]
  92. Groysberg B, Healy PM, Maber DA. 2011. What drives sell-side analyst compensation at high-status investment banks?. J. Account. Res. 49:4969–1000 [Google Scholar]
  93. Guay WR, Kothari SP, Shu S. 2011. Properties of implied cost of capital using analysts’ forecasts. Aust. J. Manag. 36:2125–49 [Google Scholar]
  94. Hayes RM. 1998. The impact of trading commission incentives on analysts’ stock coverage decisions and earnings forecasts. J. Account. Res. 36:2299–320 [Google Scholar]
  95. Healy PM, Hutton AP, Palepu KG. 1999. Stock performance and intermediation changes surrounding sustained increases in disclosure. Contemp. Account. Res. 16:3485–520 [Google Scholar]
  96. Heflin F, Subramanyam KR, Zhang Y. 2003. Regulation FD and the financial information environment: early evidence. Account. Rev. 78:11–37 [Google Scholar]
  97. Hellwig MF. 1980. On the aggregation of information in competitive markets. J. Econ. Theory 22:3477–98 [Google Scholar]
  98. Hilary G, Hsu C. 2013. Analyst forecast consistency. J. Finance 68:1271–97 [Google Scholar]
  99. Hong H, Kubik JD. 2003. Analyzing the analysts: career concerns and biased earnings forecasts. J. Finance 58:1313–52 [Google Scholar]
  100. Hong H, Kubik JD, Solomon A. 2000. Security analysts’ career concerns and herding of earnings forecasts. RAND J. Econ. 31:1121–44 [Google Scholar]
  101. Hope O-K. 2003a. Accounting policy disclosures and analysts’ forecasts. Contemp. Account. Res. 20:2295–321 [Google Scholar]
  102. Hope O-K. 2003b. Disclosure practices, enforcement of accounting standards, and analysts’ forecast accuracy: an international study. J. Account. Res. 41:2235–72 [Google Scholar]
  103. Hou K, van Dijk MA, Zhang Y. 2012. The implied cost of capital: a new approach. J. Account. Econ. 53:3504–26 [Google Scholar]
  104. Hughes J, Liu J, Liu J. 2007. Information asymmetry, diversification and the cost of capital. Account. Rev. 82:3705–29 [Google Scholar]
  105. Hughes J, Liu J, Su W. 2008. On the relation between predictable market returns and predictable analyst forecast errors. Rev. Account. Stud. 13:2–3266–91 [Google Scholar]
  106. Hui KW, Yeung PE. 2013. Underreaction to industry-wide earnings and the post-forecast revision drift. J. Account. Res. 51:4701–37 [Google Scholar]
  107. Hunton JE, McEwen RA. 1997. An assessment of the relation between analysts’ earnings forecast accuracy, motivational incentives and cognitive information search strategy. Account. Rev. 72:4497–515 [Google Scholar]
  108. Imhoff E, Lobo G. 1984. Information content of analysts’ composite forecast revisions. J. Account. Res. 22:2541–54 [Google Scholar]
  109. Irvine PJ. 2000. Do analysts generate trade for their firms? Evidence from the Toronto stock exchange. J. Account. Econ. 30:2209–26 [Google Scholar]
  110. Irvine PJ, Lipson M, Puckett A. 2007. Tipping. Rev. Financ. Stud. 20:3741–68 [Google Scholar]
  111. James C, Karceski J. 2006. Strength of analyst coverage following IPOs. J. Financ. Econ. 82:11–34 [Google Scholar]
  112. Juergens JL, Lindsey L. 2009. Getting out early: an analysis of market making activity at the recommending analyst's firm. J. Finance 64:52327–59 [Google Scholar]
  113. Kadan O, Madureira L, Wang R, Zach T. 2009. Conflicts of interest and stock recommendations: the effects of the Global Settlement and related regulations. Rev. Financ. Stud. 22:104189–217 [Google Scholar]
  114. Kasznik R, McNichols MF. 2002. Does meeting earnings expectations matter? Evidence from analyst forecast revisions and share prices. J. Account. Res. 40:3727–59 [Google Scholar]
  115. Ke B, Petroni KR, Yu Y. 2008. The effect of Regulation FD on transient institutional investors’ trading behavior. J. Account. Res. 46:4853–83 [Google Scholar]
  116. Ke B, Yu Y. 2006. The effect of issuing biased earnings forecasts on analysts’ access to management and survival. J. Account. Res. 44:5965–99 [Google Scholar]
  117. Kelly B, Ljungqvist A. 2012. Testing asymmetric-information asset pricing models. Rev. Financ. Stud. 25:51366–413 [Google Scholar]
  118. Koch AS, Lefanowicz CE, Robinson JR. 2013. Regulation FD: a review and synthesis of the academic literature. Account. Horiz. 27:3619–46 [Google Scholar]
  119. Kolasinski AC. 2006. Is the Chinese Wall too high? Investigating the costs of new restrictions on cooperation between analysts and investment bankers Work. Pap., Mays Sch. Bus., Tex. A&M Univ. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=895365 [Google Scholar]
  120. Kolasinski AC, Kothari SP. 2008. Investment banking and analyst objectivity: evidence from analysts affiliated with mergers and acquisitions advisors. J. Financ. Quant. Anal. 43:4817–42 [Google Scholar]
  121. Kothari SP. 2001. Capital markets research in accounting. J. Account. Econ. 31:105–231 [Google Scholar]
  122. Kirk M. 2011. Research for sale: determinants and consequences of paid-for analyst research. J. Financ. Econ. 100:1182–200 [Google Scholar]
  123. Krigman L, Shaw WH, Womack KL. 2001. Why do firms switch underwriters?. J. Financ. Econ. 60:2–3245–84 [Google Scholar]
  124. Kross W, Ro B, Schroeder D. 1990. Earnings expectations: the analysts’ information advantage. Account. Rev. 65:2461–76 [Google Scholar]
  125. Lambert RA, Leuz C, Verrecchia RE. 2007. Accounting information, disclosure, and the cost of capital. J. Account. Res. 45:2385–420 [Google Scholar]
  126. Lambert RA, Leuz C, Verrecchia RE. 2011. Information asymmetry, information precision, and the cost of capital. Rev. Finance 16:11–29 [Google Scholar]
  127. Lang MH, Lins K, Miller D. 2004. Concentrated control, analyst following, and valuation: Do analysts matter most when investors are protected least?. J. Account. Res. 42:3589–623 [Google Scholar]
  128. Lang MH, Lundholm RJ. 1996. Corporate disclosure policy and analyst behavior. Account. Rev. 71:4467–92 [Google Scholar]
  129. Larocque S. 2013. Analysts’ earnings forecast errors and cost of equity capital estimates. Rev. Account. Stud. 18:1135–66 [Google Scholar]
  130. Laster D, Bennett P, Geoum I. 1999. Rational bias in macroeconomic forecasts. Q. J. Econ. 114:1293–318 [Google Scholar]
  131. Lee CMC, Ng D, Swaminathan B. 2009. Testing international asset pricing models using implied costs of capital. J. Financ. Quant. Anal. 44:2307–35 [Google Scholar]
  132. Lehavy R, Li F, Merkley K. 2011. The effect of annual report readability on analyst following and the properties of their earnings forecasts. Account. Rev. 86:31087–115 [Google Scholar]
  133. Lev B. 1989. On the usefulness of earnings and earnings research: lessons and directions from two decades of empirical research. J. Account. Res. 27:153–92 [Google Scholar]
  134. Lim T. 2001. Rationality and analysts’ forecast bias. J. Finance 56:1369–85 [Google Scholar]
  135. Lin HW, McNichols M. 1998. Underwriting relationships, analysts’ earnings forecasts and investment recommendations. J. Account. Econ. 25:1101–27 [Google Scholar]
  136. Ljungqvist A, Marston F, Wilhelm WJ. 2006. Competing for securities underwriting mandates: banking relationships and analyst recommendations. J. Finance 61:1301–40 [Google Scholar]
  137. Lo MH, Elgers PT. 1998. Alternative adjustments to analysts’ earnings forecasts: relative and complementary performance. Financ. Rev. 33:299–114 [Google Scholar]
  138. Lys TZ, Sohn S. 1990. The association between revisions of financial analysts’ earnings forecasts and security-price changes. J. Account. Econ. 13:4341–63 [Google Scholar]
  139. Malmendier U, Shanthikumar D. 2007. Are small investors naive about incentives?. J. Financ. Econ. 85:2457–89 [Google Scholar]
  140. Matsumoto DA. 2002. Management's incentives to avoid negative earnings surprises. Account. Rev. 77:3483–514 [Google Scholar]
  141. Mayew WJ. 2008. Evidence of management discrimination among analysts during earnings conference calls. J. Account. Res. 46:3627–59 [Google Scholar]
  142. McNichols M, O'Brien PC. 1997. Self-selection and analyst coverage. J. Account. Res. 35:167–199 [Google Scholar]
  143. McNichols M, O'Brien PC, Pamukcu OM. 2007. Unaffiliated analysts’ firms Work. Pap., Sch. Account., Univ. Waterloo. http://www.arts.uwaterloo.ca/∼pobrien/myfiles/MOP_20070226.pdf [Google Scholar]
  144. Mehran H, Stulz RM. 2007. The economics of conflicts of interest in financial institutions. J. Financ. Econ. 85:2267–96 [Google Scholar]
  145. Michaely R, Womack KL. 1999. Conflict of interest and the credibility of underwriter analyst recommendations. Rev. Financ. Stud. 12:4653–86 [Google Scholar]
  146. Mikhail MB, Walther BR, Willis RH. 1999. Does forecast accuracy matter to security analysts?. Account. Rev. 74:2185–200 [Google Scholar]
  147. Miller EM. 1977. Risk, uncertainty, and divergence of opinion. J. Finance 32:41151–68 [Google Scholar]
  148. Mohanram PS, Sunder SV. 2006. How has Regulation FD affected the operations of financial analysts?. Contemp. Account. Res. 23:2491–525 [Google Scholar]
  149. O'Brien PC, Bhushan R. 1990. Analyst following and institutional ownership. J. Account. Res. 28:55–76 [Google Scholar]
  150. O'Brien PC, McNichols M, Lin H-W. 2005. Analyst impartiality and investment banking relationships. J. Account. Res. 43:4623–50 [Google Scholar]
  151. Ohlson J. 1995. Earnings, book-values, and dividends in equity valuation. Contemp. Account. Res. 11:11661–87 [Google Scholar]
  152. Park CW, Stice EK. 2000. Analyst forecasting ability and the stock price reaction to forecast revisions. Rev. Account. Stud. 5:3259–72 [Google Scholar]
  153. Pástor L, Sinha M, Swaminathan B. 2008. Estimating the intertemporal risk-return tradeoff using the implied cost of capital. J. Finance 63:62859–97 [Google Scholar]
  154. Ramnath S, Rock S, Shane PB. 2008. Financial analysts’ forecasts and stock recommendations: a review of the research. Found. Trends. Finance 2:4311–21 [Google Scholar]
  155. Richardson SA, Teoh SH, Wysocki PD. 2004. The walk-down to beatable analyst forecasts: the role of equity issuance and insider trading incentives. Contemp. Account. Res. 21:4885–924 [Google Scholar]
  156. Richardson SA, Tuna I, Wysocki PD. 2010. Accounting anomalies and fundamental analysis: a review of recent research advances. J. Account. Econ. 50:410–54 [Google Scholar]
  157. Roulstone DT. 2003. Analyst following and market liquidity. Contemp. Account. Res. 20:3551–78 [Google Scholar]
  158. Sadka R, Scherbina A. 2007. Analyst disagreement, mispricing, and liquidity. J. Finance 62:52367–403 [Google Scholar]
  159. Schipper K. 1991. Analysts’ forecasts. Account. Horiz. 5:4105–21 [Google Scholar]
  160. Sedor LM. 2002. An explanation for unintentional optimism in analysts’ earnings forecasts. Account. Rev. 77:4731–53 [Google Scholar]
  161. Sinha P, Brown LD, Das S. 1997. A re-examination of financial analysts’ differential earnings forecast accuracy. Contemp. Account. Res. 14:11–42 [Google Scholar]
  162. Sloan RG. 1996. Do stock prices fully reflect information in accruals and cash flows about future earnings?. Account. Rev. 71:3289–315 [Google Scholar]
  163. So EC. 2013. A new approach to predicting analyst forecast errors: Do investors overweight analyst forecasts?. J. Financ. Econ. 108:3615–40 [Google Scholar]
  164. Stambaugh RF, Yu J, Yuan Y. 2015. Arbitrage asymmetry and the idiosyncratic volatility puzzle. J. Finance 70:51903–48 [Google Scholar]
  165. Stickel SE. 1991. Common stock returns surrounding earnings forecast revisions: puzzling evidence. Account. Rev. 66:2402–16 [Google Scholar]
  166. Stickel SE. 1992. Reputation and performance among security analysts. J. Finance 47:51811–36 [Google Scholar]
  167. Tobin J. 1969. A general equilibrium approach to monetary theory. J. Money Credit Bank. 1:115–29 [Google Scholar]
  168. Wang J. 1993. A model of intertemporal asset prices under asymmetric information. Rev. Econ. Stud. 60:2249–82 [Google Scholar]
  169. Westphal JD, Clement MB. 2008. Sociopolitical dynamics in relations between top managers and security analysts: favor rendering, reciprocity, and analyst stock recommendations. Acad. Manag. J. 51:5873–97 [Google Scholar]
  170. Wu JS, Zang AY. 2009. What determines financial analysts’ career outcomes during mergers?. J. Account. Econ. 47:1–259–86 [Google Scholar]
  171. Zhang XF. 2006. Information uncertainty and stock returns. J. Finance 61:1105–37 [Google Scholar]

Data & Media loading...

  • Article Type: Review Article
This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error