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Herding in analyst earnings forecasts: evidence from the United Kingdom

Herding in analyst earnings forecasts: evidence from the United Kingdom We present an empirical analysis of herding behavior in analyst forecasts of earnings‐per‐share. Herding is defined as ‘excessive agreement’ among analyst predictions, i.e., a surprising degree of consensus relative to the predictability of corporate earnings. The data are for U.K. companies between 1986 and 1997. We examine the effects of forecast horizon and analyst coverage on forecast accuracy and dispersion. The evidence supports overoptimism, overreaction, and herding in analyst forecasts. G1, G14 http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png European Financial Management Wiley

Herding in analyst earnings forecasts: evidence from the United Kingdom

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Publisher
Wiley
Copyright
Blackwell Publishers Ltd 1999
ISSN
1354-7798
eISSN
1468-036X
DOI
10.1111/1468-036X.00087
Publisher site
See Article on Publisher Site

Abstract

We present an empirical analysis of herding behavior in analyst forecasts of earnings‐per‐share. Herding is defined as ‘excessive agreement’ among analyst predictions, i.e., a surprising degree of consensus relative to the predictability of corporate earnings. The data are for U.K. companies between 1986 and 1997. We examine the effects of forecast horizon and analyst coverage on forecast accuracy and dispersion. The evidence supports overoptimism, overreaction, and herding in analyst forecasts. G1, G14

Journal

European Financial ManagementWiley

Published: Jul 1, 1999

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