Divergence of analysts’ earnings forecasts and the stock returns‐earnings relation

Abstract

Outlines previous research on the relationship between stock returns and earnings and investigates the effects of divergence between security analysts’ earnings forecasts on this relationship. Uses cross‐sectional analysis, time series and variable parameter models on 1981‐88 US data to see whether the stock returns‐earnings coefficient decreases with increased disagreement between analysts and shows that it does. Considers the implications for policy makers and accounting research design; and consistency with other research.

Citation

Kirk, F.R., Lobo, G.J. and Fritsche, S.R. (1998), "Divergence of analysts’ earnings forecasts and the stock returns‐earnings relation", Managerial Finance, Vol. 24 No. 6, pp. 24-38. https://doi.org/10.1108/03074359810765561