Analysts' Incentives and Street Earnings

• 成果类型: Article
• 署名作者: Baik, Bok; Farber, David B.; Petroni, Kathy
• 署名单位: Seoul National University (SNU); University of Missouri System; University of Missouri Columbia; Michigan State University; Michigan State University's Broad College of Business
• 刊物名称: JOURNAL OF ACCOUNTING RESEARCH
• ISSN/ISSBN: 0021-8456
• DOI: 10.1111/j.1475-679X.2008.00311.x
• 发表日期: 2009
• 页码: 45-69
• 关键词: EMPIRICAL-ASSESSMENT; forecasts; GAAP; expectations; decisions

摘要

We examine whether analysts' incentives are associated with street earnings. Because prior research argues that analysts' incentives to promote stocks increase in the extent to which the stock exhibits glamour characteristics, we predict that analysts are more likely to make income-increasing adjustments in determining street earnings for glamour stocks than for value stocks. We find that analysts are more likely to exclude expense items from street earnings for glamour stocks than for value stocks and that excluded expense items help predict future earnings for glamour stocks but not for value stocks. Overall, our results suggest that analysts' self-interest influences street earnings and this self-interest leads to street earnings that are less useful in predicting future earnings for glamour stocks.