Journal article
Analyst Forecast Revisions and Market Price Discovery
The Accounting review, Vol.78(1), pp.193-225
01/01/2003
DOI: 10.2308/accr.2003.78.1.193
Abstract
We document several factors that help explain cross-sectional variations in the post-revision price drift associated with analyst forecast revisions. First, the market does not make a sufficient distinction between revisions that provide new information (“high-innovation” revisions) and revisions that merely move toward the consensus (“low-innovation” revisions). Second, the price adjustment process is faster and more complete for “celebrity” analysts (Institutional Investor All-Stars) than for more obscure yet highly accurate analysts (Wall Street Journal Earnings-Estimators). Third, controlling for other factors, the price adjustment process is faster and more complete for firms with greater analyst coverage. Finally, a substantial portion of the delayed price adjustment occurs around subsequent earnings-announcement and forecast-revision dates. Collectively, these findings show that more subtle aspects of an earnings revision signal can hinder the efficacy of market price discovery, particularly in firms with relatively low analyst coverage, and that subsequent earnings-related news events serve as catalysts in the price discovery process.
Details
- Title: Subtitle
- Analyst Forecast Revisions and Market Price Discovery
- Creators
- Cristi A. Gleason - University of ArizonaCharles M. C. Lee - Cornell University
- Resource Type
- Journal article
- Publication Details
- The Accounting review, Vol.78(1), pp.193-225
- DOI
- 10.2308/accr.2003.78.1.193
- ISSN
- 0001-4826
- eISSN
- 1558-7967
- Language
- English
- Date published
- 01/01/2003
- Academic Unit
- Accounting
- Record Identifier
- 9984380448602771
Metrics
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