Analyst forecast revision consistency and reversal: Evidence of stock market efficiency-Reference-Cited by-同舟云学术

Analyst forecast revision consistency and reversal: Evidence of stock market efficiency

Published:2024-07-09 Issue: Volume: Page:
ISSN:1044-8136
Container-title:Journal of Corporate Accounting & Finance
language:en
Short-container-title:J Corp Accounting Finance

Author:

Chen Lin¹,Nie Dongfang²^ORCID,Shi Yuan³,Zhang Yinghong⁴

Affiliation:

1. Eberhardt School of Business University of the Pacific Stockton California USA

2. Seaver College Pepperdine University Malibu California USA

3. School of Graduate Professional Studies Penn State Great Valley Malvern Pennsylvania USA

4. Department of Accounting University of Central Oklahoma Edmond Oklahoma USA

Abstract

AbstractThis study reexamines the information content and market price discovery associated with individual analysts' earnings forecast revisions. We refine the definition of high‐innovation revisions as high‐innovation consistent forecast revisions and high‐innovation reversal forecast revisions. Cross‐sectional analysis shows that high‐innovation reversal good (bad) news revisions, although having larger forecast changes, cause fewer upward (downward) post‐revision price shifts than high‐innovation consistent good (bad) news revisions. We also find that the market can distinguish which group of analysts provides more useful information about firms’ true value, but it takes some time for the market to digest this useful information.

Publisher

Wiley

Link

https://onlinelibrary.wiley.com/doi/pdf/10.1002/jcaf.22744

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