WEAK ANALYSTS' STRATEGY OF FORECAST RELEASE TIMING

This study investigates weak analysts' behavior of announcing their earnings forecasts before strong analysts' forecast disclosures. Furthermore, this study provides an explanation why weak analysts do so, giving up utilizing strong analysts' forecast information. Weak analysts are li...

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Bibliographic Details
Published inAllied Academies International Conference. Academy of Accounting and Financial Studies. Proceedings Vol. 10; no. 1; p. 19
Main Author Jung, Do-Jin
Format Journal Article
LanguageEnglish
Published Arden Jordan Whitney Enterprises, Inc 01.01.2005
Subjects
Abnormal returns
Accounting
Accuracy
Analysts
Correlation analysis
Disclosure
Earnings forecasting
Earnings per share
Hypotheses
Reputations
Studies
Timing issues
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Summary:This study investigates weak analysts' behavior of announcing their earnings forecasts before strong analysts' forecast disclosures. Furthermore, this study provides an explanation why weak analysts do so, giving up utilizing strong analysts' forecast information. Weak analysts are likely to announce their earnings forecasts before strong analysts' forecast disclosures because the market more greatly responds to leading weak analysts' earnings forecasts than following weak analysts' forecasts. These results imply that analysts consider timeliness as well as forecast accuracy when they choose forecast release timing, consistent with the theory that the value of information depends on both quality and timeliness. Furthermore, this study presents weak analysts' strategies of forecast release timing; they choose pre- (post-) announcements before (after) strong analysts' forecast disclosures when their earnings forecasts are (not) expected to be accurate as much as strong analysts' forecasts.