Do Investors Respond to Analysts ’ Forecast Revisions as if Forecast Accuracy Is All That Matters ?

  title={Do Investors Respond to Analysts ’ Forecast Revisions as if Forecast Accuracy Is All That Matters ?},
  author={Michael B. Clement and Shek-Kam Tse},
Prior research suggests that investors’ response to analyst forecast revisions increases with the analyst’s forecast accuracy. We extend this research by examining whether investors appear to extract all of the information that analyst characteristics provide about forecast accuracy. We find that only some of the analyst characteristics that are associated with future forecast accuracy are also associated with return responses to forecast revisions. This suggests that investors fail to extract… CONTINUE READING
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