Cost behavior and analysts ’ earnings forecasts

  title={Cost behavior and analysts ’ earnings forecasts},
  author={Dan J Weiss},
This paper examines how firms’ asymmetric cost behavior influences analysts’ earnings forecasts, primarily the accuracy of analysts’ consensus earnings forecasts. I show that firms with more sticky costs behavior have less accurate analysts’ earnings forecasts than firms with less sticky costs behavior. Furthermore, findings indicate that cost stickiness influences analysts’ coverage priorities and investors partially consider sticky cost behavior in forming their beliefs on the value of firms… CONTINUE READING