| Author: | Abarbanell, J. S. Bushee, B. J. |
| Title: | Fundamental analysis, future earnings, and stock prices |
| Journal: | Journal of Accounting Research
1997 : SPRING, VOL. 35:1, p. 1-24 |
| Index terms: | FINANCIAL ANALYSIS ACCOUNTING SHARE PRICES DECISION ANALYSIS FUTURE |
| Language: | eng |
| Abstract: | In this article it is investigated, how detailed financial statement data enter the decisions of market participants by examining whether current changes in the signals are informative about subsequent earnings changes. Analysts and investors can rely on many fundamental signals identified by Lev and Thiagarajan (1993) when assessing future firm performance, but some fundamental signals explain only long-term earnings growth. Analysts' forecasts do not completely impound the information that investors percieve is contained in the fundamental signals. The findings on analysts underreaction to financial statement information raise the possibility that investors in general may be inefficient in their fundamental analyses. Macroeconomic and firm-specific variables condition some relations between the signals and future earnings, revisions and forecast earnings |
SCIMA