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This research examines the accuracy of analyst forecasts and the presence of optimistic bias over time.

Analyst Forecasting Errors: Additional Evidence

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This research examines the accuracy of analyst forecasts and the presence of optimistic bias over time.
Analyzed historical data on analyst forecasting errors from 1985 to 1996.
Compared errors across different firms based on market capitalization and industry types.
Forecasting errors showed a decreasing trend from 1985 to 1996.
S&P 500 firms had smaller forecasting errors compared to other firms, with a notable absence of optimistic bias from 1993 to 1996.
Larger firms with more analyst coverage demonstrated smaller errors in forecasts.

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Randomized trial shows trends in analyst forecasting errors and biases in S&P 500 firms, indicating improvement over time.

Lawrence D. Brown (1997) studied this question.

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