Do accurate earnings forecasts facilitate superior investment recommendations?

• Main Authors: LOH, Roger, MIAN, G. Mujtaba
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2006
• Subjects: Earnings-based valuation models; Earnings forecasts; Stock recommendations; Security analysts; Finance and Financial Management; Portfolio and Security Analysis
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/2641; https://ink.library.smu.edu.sg/context/lkcsb_research/article/3640/viewcontent/Do_accurate_earnings_forecasts_facilitate_superior_pp_2003.pdf
• Institution: Singapore Management University

We find that analysts who issue more accurate earnings forecasts also issue more profitable stock recommendations. The average factor-adjusted return associated with the recommendations of analysts in the highest accuracy quintile exceeds the corresponding return for analysts in the lowest accuracy...