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flows vis-a-vis earnings is large; (3) analysts forecast extreme positive accruals; (4) analysts downwardly revise cash flow …
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one-period-ahead forecast horizon) in about 66-76% of cases. However, this research has not confirmed the supremacy of …
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(earnings) forecasts. Finally, we show that bond investors' reaction to bond analysts' cash flow forecast revision is greater … than that to bond analysts' earnings forecast and that bond market reacts only to bond analysts' forecast revisions but not … to equity analysts' forecast revisions. This manifests bond investors' stronger demand for reliable information on future …
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Current evidence on the sophistication of analysts' cash flow forecasts is ambiguous. For example, Call et al. (2009) show that issuing cash flow forecasts has important benefits for analysts' earnings forecasts, while Givoly et al. (2009) question the validity of this result, arguing that...
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