Review of Accounting Studies

, Volume 16, Issue 1, pp 29–58 | Cite as

Analyst reputation and the issuance of disaggregated earnings forecasts to I/B/E/S

  • Yonca Ertimur
  • William J. Mayew
  • Stephen R. Stubben


Although sell-side analysts privately forecast revenues and expenses when producing earnings forecasts, not all analysts choose to provide I/B/E/S with earnings forecasts disaggregated into revenues and expenses. We investigate the role of reputation in explaining this decision. We find that analysts without established reputations are more likely than reputable analysts to issue disaggregated earnings forecasts to I/B/E/S, consistent with I/B/E/S exposure benefits accruing to analysts seeking to establish a reputation. Among less reputable analysts, those with high ability are more likely to disaggregate, consistent with this group reaping greater benefits from the exposure I/B/E/S provides. Additional tests support our primary hypotheses. Among less reputable analysts, those who disaggregate are more (less) likely to be promoted (demoted or terminated). The stock market responds similarly, with more weight assigned to earnings forecast revisions provided by analysts who disaggregate their earnings forecasts.


Disaggregated earnings forecasts Revenue forecasts Security analysts Reputation 

JEL Classification

D83 G14 J44 



This study was formerly titled “Analyst Reputation Building via Sales Forecasting.” We appreciate the helpful comments of Russell Lundholm (editor), an anonymous referee, the managing director and director of research at a prominent sell-side research firm, Qi Chen, Shuping Chen, Michael Clement, Shane Dikolli, William Franklin, Jennifer Francis, Dawn Matsumoto, Maureen McNichols, Brian Ossenbeck, Chris Parsons, Katherine Schipper, Praveen Sinha, Mohan Venkatachalam, Yun Zhang, and workshop participants at the 2008 FEA Conference, University of Washington, and the UNC/Duke 2007 Fall Research Camp. We also thank Alok Kumar for providing the Institutional Investor All-Star data.


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Copyright information

© Springer Science+Business Media, LLC 2009

Authors and Affiliations

  • Yonca Ertimur
    • 1
  • William J. Mayew
    • 1
  • Stephen R. Stubben
    • 2
  1. 1.Fuqua School of BusinessDuke UniversityDurhamUSA
  2. 2.Kenan-Flagler Business SchoolThe University of North Carolina at Chapel HillChapel HillUSA

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