An Examination of the Accuracy of Earnings Forecasts

Richards, R. Malcolm; Benjamin, James J.; Strawser, Robert H.

doi:10.2307/3665260

Cited by 16 publications

(6 citation statements)

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“…Using the chi square test for independent samples on modified second file data the null hypothesis could be rejected at the 90% confidence level for all paired combinations of beta categories, but only in three instances at the 95% level (0.60.8 vs 0.8-1.0 and vs 1.0-1.2; and 0.8-1.0 vs 1.0-1.2). Again the differences were most obvious in terms of the squared relative error statistics, and are also evident in the absolute '?Richards, Benjamin and Strawser (1977) also found a high correlation between forecast accuracy and earnings variability. relative error distributions shown in Table 3.…”

Section: ( E ) Accuracy In Relation To Risk Categorymentioning

confidence: 83%

“…Cragg and Malkiel, 1968;Ferris, 1976), but more recent research by Richards (1976) and Richards, Benjamin and Strawser (1977) suggests it is indeed an important determinant of forecast accuracy. As a result, the following proposition was formulated as a null hypothesis:…”

Section: ( D ) Accuracy In Relation To Industry Categorymentioning

confidence: 96%

“…Richards, Benjamin and Strawser, 1977), the first two covering the situation where the time series follows a simple trend pattern, the third being more appropriate if it is martingale. They were:…”

Section: Measuring Forecasting Accuracymentioning

confidence: 99%

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The Accuracy of Brokers' Profit Forecasts in the UK

Bhaskar¹,

Morris²

1984

Accounting and Business Research

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Section: ( E ) Accuracy In Relation To Risk Categorymentioning

confidence: 83%

Section: ( D ) Accuracy In Relation To Industry Categorymentioning

confidence: 96%

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The Accuracy of Brokers' Profit Forecasts in the UK

Bhaskar¹,

Morris²

1984

Accounting and Business Research

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“…The findings with respect to revenue forecasting await the results of replication in further research. NOTES 1 2 For reviews of this literature see Abdel-khalik and Thompson (1978), Foster (1978), Richards and Fraser (1978) and Westwick (1982). In The Netherlands, for example, the provision in the EEC Fourth Directive requiring companies to disclose information on their likely future developments has led to draft legislation covering forecasts of employment, investment and financing as well as the circumstances affecting sales revenue and profitability.…”

Section: Discussionmentioning

confidence: 99%

Forecasting Corporate Revenue and Profit: Time‐series Models Versus Management and Analysts

Kodde¹,

Schreuder²

1984

Business Fin & Account

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The predictability of corporate profits has attracted considerable research over the last decade or so. While early work focused on the performance of forecast models, corporate managements and financial analystspm se, later studies have increasingly endeavoured to determine the comparative accuracy of the forecasts generated by these sources.1 One reason for this shift in emphasis has obviously been the search for an external benchmark against which to evaluate forecast accuracy. The need for such a benchmark may have become more apparent because of the trend toward profit forecast disclosure by firms in severalcountries, both on a voluntary basis and as a result of policy shifts by accounting rulemaking bodies.' The question then arises whether these corporate forecasts are useful for outsiders -for example, to improve their investment decisions. Financial analysts have served as a knowledgeable group of outsiders in this context, while forecasting models have served as tools potentially available to any outsider.It is, of course, an empirical issue which forecast model could best serve as an external standard for evaluating management's forecast accuracy. This paper tries to shed some more light on this question. It reports primarily on the forecast accuracy of nine models which have been used to describe the time-series of corporate revenues and profits and compares the performance of these models with that of management and analyst^.^ The present research provides several extensions to and replications of previous studies: -whereas earlier research focused almost exclusively on profits, results are given here for both revenues and profits;-the comparisons are based on internal data confidentially obtained from corporate management and financial analysts rather than on published data;

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“…Chen et al (2020, p. 333) document that 'macro uncertainty measures are significantly and negatively correlated with the accuracy and informativeness of analysts' earnings forecasts and positively correlated with the dispersion of earnings forecasts', and Hope and Kang (2005), Baloria and Mamo (2017), and Arand and Kerl (2012) report similar evidence. Focusing on bias, Kretzmann et al (2015, p. 49) report that 'in recessions sell side analysts are too optimistic about the stocks they recommend to buy', but Richards et al (1977) document that EPS forecasts issued during booms tend to be overly optimistic while forecasts issued during busts are less optimistic. Dreman and Berry (1995) find no difference in optimism in EPS forecasts between expansions and recessions.…”

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confidence: 99%

Analyst Research Activity During the COVID‐19 Pandemic

Bilinski

2023

Abacus

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This paper documents that, in response to the COVID‐19 pandemic, analysts increase their research activity and significantly revise their forecasts when compared to the pre‐pandemic period. Uncertainty‐adjusted forecast errors are either comparable or smaller during the pandemic compared to the pre‐pandemic period. Investor attention and price reactions to analyst forecast revisions are higher during the pandemic and the effect is stronger in periods where investors actively search for information about firms. During the pandemic, investors value analyst price discovery role more than their role in interpreting public information. Jointly, the results suggest that analysts play an important information intermediation role during the COVID‐19 pandemic.

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An Examination of the Accuracy of Earnings Forecasts

Cited by 16 publications

References 0 publications

The Accuracy of Brokers' Profit Forecasts in the UK

The Accuracy of Brokers' Profit Forecasts in the UK

Forecasting Corporate Revenue and Profit: Time‐series Models Versus Management and Analysts

Analyst Research Activity During the COVID‐19 Pandemic

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