The Disparity between Long-Term and Short-Term Forecasted Earnings Growth
We find the disparity between long-term and short-term analyst forecasted earnings growth is a robust predictor of future returns and revisions in long-term forecasted earnings growth. After adjusting for industry characteristics, stocks whose long-term earnings growth forecasts are far above or far...
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sg-smu-ink.lkcsb_research-28942010-09-23T06:24:04Z The Disparity between Long-Term and Short-Term Forecasted Earnings Growth WARACHKA, Mitchell Craig We find the disparity between long-term and short-term analyst forecasted earnings growth is a robust predictor of future returns and revisions in long-term forecasted earnings growth. After adjusting for industry characteristics, stocks whose long-term earnings growth forecasts are far above or far below their implied short-term forecasts for earnings growth have negative and positive subsequent risk-adjusted returns, respectively. Despite the importance of conditioning on short-term forecasted earnings growth, these returns are not driven by earnings momentum. Instead, consistent with investors having limited attention, predictable revisions in long-term analyst forecasts appear to induce return predictability. 2010-01-01T08:00:00Z text https://ink.library.smu.edu.sg/lkcsb_research/1895 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1336821 Research Collection Lee Kong Chian School Of Business eng Institutional Knowledge at Singapore Management University Finance and Financial Management Portfolio and Security Analysis |
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Finance and Financial Management Portfolio and Security Analysis WARACHKA, Mitchell Craig The Disparity between Long-Term and Short-Term Forecasted Earnings Growth |
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We find the disparity between long-term and short-term analyst forecasted earnings growth is a robust predictor of future returns and revisions in long-term forecasted earnings growth. After adjusting for industry characteristics, stocks whose long-term earnings growth forecasts are far above or far below their implied short-term forecasts for earnings growth have negative and positive subsequent risk-adjusted returns, respectively. Despite the importance of conditioning on short-term forecasted earnings growth, these returns are not driven by earnings momentum. Instead, consistent with investors having limited attention, predictable revisions in long-term analyst forecasts appear to induce return predictability. |
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WARACHKA, Mitchell Craig |
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WARACHKA, Mitchell Craig |
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WARACHKA, Mitchell Craig |
title |
The Disparity between Long-Term and Short-Term Forecasted Earnings Growth |
title_short |
The Disparity between Long-Term and Short-Term Forecasted Earnings Growth |
title_full |
The Disparity between Long-Term and Short-Term Forecasted Earnings Growth |
title_fullStr |
The Disparity between Long-Term and Short-Term Forecasted Earnings Growth |
title_full_unstemmed |
The Disparity between Long-Term and Short-Term Forecasted Earnings Growth |
title_sort |
disparity between long-term and short-term forecasted earnings growth |
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Institutional Knowledge at Singapore Management University |
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2010 |
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https://ink.library.smu.edu.sg/lkcsb_research/1895 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1336821 |
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