Analysts’ issuance of supplementary forecasts as determinant of earnings forecast accuracy

Abstract

In this chapter, I investigate analysts’ issuance of so-called supplementary forecasts (e.g. cash flow or sales forecasts). I argue that issuing supplementary forecasts has an impact on the accuracy of the analyst’s respective earnings forecast and introduce a new variable to measure this effect. This new variable is based on the number of different kinds of supplementary forecasts an analyst issues besides her earnings forecast. From empirical analyses I find that the measure can explain differences in analysts’ earnings forecast accuracy.