This paper provides evidence of systematic errors in the way I/B/E/S reports analyst earnings forecasts. Analysis of the I/B/E/S earnings forecast database over the 1982-2014 period pinpointed a lack of consistency in the identification of financial analysts, a number of whom are consequently...

We challenge the view that persistent differences in accuracy across analysts are proof that analysts differ in their ability to forecast stock prices. We show that these persistent differences in accuracy are driven instead by stock return volatility. Building upon option pricing theory, we...