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A comparative analysis of earnings forecasts in Europe

Capstaff, John and Paudyal, Krishna and Rees, William P. (2001) A comparative analysis of earnings forecasts in Europe. Journal of Business Finance and Accounting, 28 (5-6). pp. 531-562. ISSN 0306-686X

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Abstract

This study examines the accuracy and bias of financial analysts' EPS forecasts in nine European countries during 1987 to 1995. There are significant differences between the countries which may be due to the differences in earnings behaviour, accounting practices, and the influence of securities markets. An optimistic bias is endemic in European forecasts, consistent with research from the US. Investors who incorporate earnings forecasts in their stock selection procedures may be able to improve returns by explicitly adjusting their models for observed regularities in earnings forecast errors. However, we have shown that these regularities differ in incidence and magnitude across the countries studied, and further research is needed to effectively model these differences.

Item type: Article
ID code: 3640
Keywords: earnings forecasts, Europe, business finance, accounting, Finance, Finance, Business, Management and Accounting (miscellaneous), Accounting
Subjects: Social Sciences > Finance
Department: Strathclyde Business School > Accounting and Finance
Unknown Department
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Depositing user: Strathprints Administrator
Date Deposited: 05 Jul 2007
Last modified: 04 Sep 2014 10:16
URI: http://strathprints.strath.ac.uk/id/eprint/3640

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