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A comparative analysis of earnings forecasts in Europe

Capstaff, J.; Paudyal, K.; Rees, W.

Authors

J. Capstaff

K. Paudyal

W. Rees



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.

Citation

Capstaff, J., Paudyal, K., & Rees, W. (2001). A comparative analysis of earnings forecasts in Europe. Journal of Business Finance and Accounting, 28(5-6), 531-562. https://doi.org/10.1111/1468-5957.00384

Journal Article Type Article
Publication Date Jun 1, 2001
Deposit Date Aug 19, 2008
Journal Journal of Business Finance and Accounting
Print ISSN 0306-686X
Electronic ISSN 1468-5957
Publisher Wiley
Peer Reviewed Peer Reviewed
Volume 28
Issue 5-6
Pages 531-562
DOI https://doi.org/10.1111/1468-5957.00384

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