This paper finds that about one-quarter of analyst forecast dispersion and one-half of the dispersion-return relationship between 1985 and 2012 are explained by analyst overconfidence. In particular, the firm’s analyst overconfidence mean and analyst overconfidence dispersion are the two most...

Analysts’ cash flow (CPS) forecasts have been the topic of much recent research. While some prior research (for example, Givoly et al., 2009) suggests that these forecasts have very limited usefulness, Call et al. (2012) find evidence to the contrary. We take this body of research forward and...