This study examines whether analysts in the extractive industries in Australia adjust their private information searching and processing in response to the complexity of information about a firm's exploration and evaluation (E&E) activities. We find that both the proportion of private...

This paper examines how incentive-based and behavior-based variables affect analyst recommendation revisions. Specifically, we use duration analysis to test analysts' underreaction to new information by isolating effects of incentives and cognitive processing biases (i.e., cognitive dissonance...

We examine the impact of Seasonal Affective Disorder (SAD) on financial analysts. We hypothesize and find that analysts are more pessimistic, less precise, and more asymmetric in their boldness in the fall, as indicated by their forecasts of quarterly earnings. The effects are apparent in all...

Prior literature shows that earnings have come to explain less stock price movement over time, suggesting that firm fundamental information has become less important. In this paper, we replace earnings with earnings announcement returns as a measure of firm fundamental news and find that these...

Recent work shows that the role of accrual accounting in mitigating the timing differences between cash flows and operating performance has been disappearing over time (Bushman, Lerman, and Zhang 2016). We argue that even though there is noise in the accrual accounting process, sophisticated...

We examine the effect of MiFID II, which mandated the unbundling and separate pricing of analyst research in Europe beginning in 2018. We find that the requirements of MiFID II were associated with a reduction in analyst following for European firms relative to US firms, with decreases in...

This paper examines whether analysts and investors efficiently incorporate the informational cues from managerial linguistic complexity (e.g. Fog) on conference calls into their forecasts and trading decisions. We predict that managers use linguistic complexity to obfuscate before poor future...

I study security analysts' early forecasts. Forecasts with over one-year horizons constitute nearly one-half of all analysts' forecasts. I find that the demand for early forecasts is driven by long-term institutional investors and that analyst skills and resources are more important for...

Firms that report consecutive earnings increases, called earnings strings, receive an overvaluation from the stock market. We examine whether the presence of earnings strings affects equity research analysts' opinions beyond company fundamentals. We find that analysts issue more optimistic...

Purpose: This study investigates the behavior of sell-side analysts covering firms that are about to experience breaks in strings of consecutive quarterly earnings increases.Design/methodology/approach: We estimate the likelihood of analysts predicting a break using logit regressions for 1.8M...