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| Author: | Nandelstadh, A. von |
| Title: | Do analysts overweight earnings information? |
| Journal: | Liiketaloudellinen aikakauskirja
2003 : VOL. 52:1, p. 9-30 |
| Index terms: | Stock markets Financial statements Forecasting Reporting Companies Industries Nordic countries Scandinavia |
| Language: | eng |
| Abstract: | This study examines how analysts utilize past financial statement information to form their future expectations for the firms they cover. Using data for the Danish, Finnish, Norwegian and Swedish markets, this study presents some evidence that analysts overreact to past change in earnings, measured as the first derivative of reported earnings per share. The empirical results on the Nordic markets show that the sign of the second derivative impacts the direction of the consensus forecast error. Rephrased, financial analysts are likely to fall behind the curve in case of a shift in earnings paths. |
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