We posit that a change in analyst interest in a firm is an early indicator of the firm's future fundamentals, capital market activities, and stock returns. We measure increases in analyst interest by observing analysts who do not cover a firm but participate in that firm's earnings conference...

We posit that a change in analyst interest in a firm is an early indicator of the firm's future fundamentals, capital market activities, and stock returns. We measure increases in analyst interest by observing analysts who do not cover a firm but participate in that firm's earnings conference...

This study examines the relationship between components of OCI and analysts' forecasting behaviour, being forecast accuracy, analyst following and herding. The findings show that cash flow hedge (CFH) and foreign currency (FCX) elements are negatively associated with forecast accuracy and...

The investment CAPM, in which expected returns vary cross-sectionally with investment, profitability, and expected growth, provides an equilibrium foundation for Graham and Dodd (1934). The q5 model is a good start to explaining prominent security analysis strategies, such as Abarbanell and...

We evaluate the influence of measurement error in analysts' forecasts on the accuracy of implied cost of capital estimates from various implementations of the ‘implied cost of capital' approach, and develop corrections for the measurement error. We document predictable error in the implied...

This paper examines analyst responses to management forecasts issued as a range, a large and growing proportion of those forecasts. We find that information conveyed through the four parameters of the management forecasts - the upper and lower bounds, the width, and the midpoint - explains...

Prior studies show that investor learning about earnings-based return predictors from academic research erodes return predictability. However, the signaling power of “bottom-line” earnings has declined over time, which complicates assessments of investor learning about profitability signals...

This paper presents results from an experiment and follow-up survey examining whether stock prices influence analysts' earnings forecasts. In our experiment, prices influence analysts' forecasts when uncertainty about future earnings is high, but not when uncertainty is low. Additional analyses...

We analyze three different mechanical models to forecast earnings and compare their forecasts with those of analysts. Moreover, we evaluate implied cost of capital (ICC) estimates that are based on these forecasts. With our analyses we answer three open questions in the literature. 1) Do model...

Recent work in management accounting offers several novel insights into firms' cost behavior. This study explores whether financial analysts appropriately incorporate information on two types of cost behavior in predicting earnings - cost variability and cost stickiness. Since analysts'...