scholarly journals Earnings forecasts of female CEOs: quality and consequences

2022 ◽  
Author(s):  
Claude Francoeur ◽  
Yuntian Li ◽  
Zvi Singer ◽  
Jing Zhang
Keyword(s):  
Voluntary Disclosure ◽  
Financial Analysts ◽  
Earnings Forecasts ◽  
Senior Management ◽  
Analyst Coverage ◽  
Coverage Gap ◽  
Research Designs ◽  
Female Ceos ◽  
Alternative Research ◽  
Increased Pressure

AbstractThis study examines the voluntary disclosure of earnings forecasts by female CEOs. We find that in the backdrop of increased pressure to perform from investors and other stakeholders, female CEOs tend to issue more earnings forecasts than male CEOs, and those forecasts are more accurate. We also find that while financial analysts generally prefer to follow companies headed by male CEOs, female CEOs’ efforts to issue accurate earnings forecasts pay off, as these efforts help them close the analyst coverage gap. We provide complementary evidence on the disclosure efforts of female CEOs with regard to updates to the forecast and the 10-K report. Lastly, we show that financial analysts rely more on the earnings forecasts of female CEOs, possibly because they recognize female CEOs’ superior forecasting quality. Our results are robust to the use of alternative research designs, including difference-in-difference, propensity score matching, and entropy balancing. Overall, our study documents gender differences in voluntary disclosure by senior management.

Delayed Security Price Adjustments to Financial Analysts' Forecasts of Annual Earnings

2001 ◽  
Vol 76 (4) ◽  
pp. 613-632 ◽  
Author(s):  
Pieter T. Elgers ◽  
May H. Lo ◽  
Ray J. Pfeiffer
Keyword(s):  
Financial Analysts ◽  
Earnings Forecasts ◽  
Security Market ◽  
Analyst Coverage ◽  
Future Earnings ◽  
Price Response ◽  
Portfolio Returns ◽  
Price Adjustments ◽  
Security Price ◽  
Annual Earnings

This paper documents that the weighting of analysts' annual earnings forecasts implicit in security prices is lower than the historical relation between financial analysts' forecasts and realized earnings. Short positions in securities in the bottom decile and long positions in the top decile of the crosssectional distribution of analysts' early-in-the-year earnings forecasts generate significant hedge-portfolio returns in the year after portfolio formation. This delayed price response is more pronounced for firms with relatively low analyst coverage, consistent with the premise that low financial analyst coverage is associated with a variety of factors that impede the information efficiency of the security market. The hedge-portfolio returns concentrate in the months of subsequent quarterly earnings announcements, suggesting that the delayed security price adjustments reflect the market's failure to incorporate information in analysts' forecasts about future earnings, rather than deficiencies in our conditional expectations of security returns.

Voluntary disclosure of intangibles and analysts’ earnings forecasts and recommendations

2016 ◽  
Vol 17 (4) ◽  
pp. 421-439 ◽  
Author(s):  
Anis Maaloul ◽  
Walid Ben Amar ◽  
Daniel Zeghal
Keyword(s):  
Voluntary Disclosure ◽  
Intangible Assets ◽  
Value Relevance ◽  
Financial Analysts ◽  
Earnings Forecasts ◽  
Annual Reports ◽  
Current Debate ◽  
Content Type ◽  
Corporate Managers ◽  
Relational Assets

Purpose The purpose of this paper is to investigate the relationship between voluntary disclosure of intangibles and financial analysts’ earnings forecasts properties. Design/methodology/approach Disclosures about intangible assets were hand-collected through content analysis of annual reports of a sample of US non-financial firms, while analysts’ earnings forecasts properties were collected from Bloomberg Professional database. The authors relied on correlation and multivariate regression analyses to test the research hypotheses. Findings The results show that increased intangible disclosures affect analysts’ earnings forecasts accuracy, dispersion, and favourable consensus recommendations. However, this effect varies according to the nature of intangible assets. Practical implications The results may be of interest to different market participants such as corporate managers, financial analysts, and standards setting bodies that recently published guidelines on voluntary disclosure of intangibles. Originality/value This study develops a new comprehensive index to measure the content of narrative disclosures about a large number of intangibles, such as human, structural, and relational assets. The findings contribute to the current debate on the value-relevance of narrative disclosures on intangibles to investors and financial analysts.

Concurrent Earnings Announcements and Analysts' Information Production

2019 ◽  
Vol 95 (1) ◽  
pp. 165-189 ◽  
Author(s):  
Matthew Driskill ◽  
Marcus P. Kirk ◽  
Jennifer Wu Tucker
Keyword(s):  
Earnings Announcements ◽  
Financial Analysts ◽  
Earnings Forecasts ◽  
Data Availability ◽  
Limited Attention ◽  
Conference Calls ◽  
Stock Recommendations ◽  
Rich Information ◽  
Sample Firm ◽  
Jel Classifications

ABSTRACT We examine whether financial analysts are subject to limited attention. We find that when analysts have another firm in their coverage portfolio announcing earnings on the same day as the sample firm (a “concurrent announcement”), they are less likely to issue timely earnings forecasts for the sample firm's subsequent quarter than analysts without a concurrent announcement. Among the analysts who issue timely earnings forecasts, the thoroughness of their work decreases as their number of concurrent announcements increases. In addition, analysts are more sluggish in providing stock recommendations and less likely to ask questions in earnings conference calls as their number of concurrent announcements increases. Moreover, when analysts face concurrent announcements, they tend to allocate their limited attention to firms that already have rich information environments, leaving behind firms in need of attention. Overall, our evidence suggests that even financial analysts, who serve as information specialists, are subject to limited attention. JEL Classifications: G10; G11; G17; G14. Data Availability: Data are publicly available from the sources identified in the paper.

How Do Observers Assess Resolve?

2019 ◽  
pp. 1-23 ◽  
Author(s):  
Joshua D Kertzer ◽  
Jonathan Renshon ◽  
Keren Yarhi-Milo
Keyword(s):  
Decision Makers ◽  
Credibility Theory ◽  
Theoretical Frameworks ◽  
Integrative Framework ◽  
Research Designs ◽  
The Us ◽  
Alternative Research ◽  
Conjoint Experiment ◽  
Costly Signals ◽  
Ordinary Citizens

ABSTRACTDespite a plethora of theoretical frameworks, IR scholars have struggled with the question of how observers assess resolve. We make two important contributions in this direction. Conceptually, we develop an integrative framework that unites otherwise disconnected theories, viewing them as a set of heuristics actors use to simplify information-rich environments. Methodologically, we employ a conjoint experiment that provides empirical traction impossible to obtain using alternative research designs. We find that ordinary citizens are ‘intuitive deterrence theorists’ who focus to a great extent on capabilities, stakes, signals and past actions in judging resolve. We also find that observers see democracies as less resolved than autocracies (not more), casting doubt on key propositions of democratic credibility theory. Finally, a conceptual replication shows that a group of elite decision makers converge with the US public in how they interpret costly signals, and in viewing democracies as less resolved than autocracies.

Corporate social responsibility and financial analysts: a review of the literature

2019 ◽  
Vol 10 (1) ◽  
pp. 183-207 ◽  
Author(s):  
Anne-Kathrin Hinze ◽  
Franziska Sump
Keyword(s):  
Financial Analysts ◽  
Future Research ◽  
Analyst Coverage ◽  
Content Type ◽  
Current State ◽  
State Of Research ◽  
Csr Disclosure ◽  
Corporate Social ◽  
The Relationship ◽  
Csr Engagement

PurposeThe purpose of this paper is to systematise the current state of research on the association between companies’ corporate social responsibility (CSR) engagement and financial analysts’ company assessment. Additionally, it aims to identify fruitful directions for future research that contribute to a further exploration of the link between CSR and financial analysts.Design/methodology/approachThis study reviews and synthesises existing research on CSR and financial analysts. Based on the research question, “What is the relationship between CSR engagement and financial analysts’ metrics?,” the authors conduct a systematic literature review. The authors search three major databases and use an extensive search term to ensure exhaustive coverage of the field. The paper then systemises the current state of research and identifies knowledge gaps and potential directions for future research.FindingsThe review of existing research shows that several studies confirm a positive link between CSR performance and analyst coverage, suggesting that external monitoring through analysts incentivises companies to enhance their CSR engagement. Further, results indicate that a company’s involvement in “sin” industries is linked to lower analyst coverage. Besides, a higher level of CSR disclosure is positively associated with analyst forecast accuracy, thus indicating that the provision of CSR-related information is linked to an enhanced information environment. High levels of CSR performance are associated with more positive recommendations from analysts. However, recent surveys and interview studies on analysts’ perceptions of CSR fail to uniformly support an increasing interest in CSR.Research limitations/implicationsFor a better understanding of the link between CSR engagement and financial analysts, two fruitful directions for future research are observed. First, future research designs should clearly differentiate between CSR disclosure and CSR performance and take account of interdependencies between them. Second, studies should address behavioural insights into how analysts process information and the influence of individual analyst characteristics on the link between CSR engagement and an analyst’s assessment of a company.Originality/valueThis study is the first to review the literature on the relationship between CSR and financial analysts. The association between CSR and financial analysts is particularly interesting given the pivotal role financial analysts play as information intermediaries in financial markets. This study delivers an in-depth understanding of existing studies and their theoretical underpinnings. Based on the existing literature, this paper develops innovative directions for future research.

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