Analyst pessimism and forecast timing

Orie E. Barron, Donal Byard, Lihong Liang

Research output: Contribution to journalArticlepeer-review

13 Scopus citations


In this study, we show that on average relatively pessimistic analysts tend to reveal their earnings forecasts later than other analysts. Further, we find this forecast timing effect explains a substantial proportion of the well-known decrease in consensus analyst forecast optimism over the forecast period prior to earnings announcements, which helps explain why analysts' longer term earnings forecasts are more optimistically biased than their shorter term forecasts. We extend the theory of analyst self-selection regarding their coverage decisions to argue that analysts with a relatively pessimistic view-compared to other analysts-are more reluctant to issue their earnings forecasts, with the result that they tend to defer revealing their earnings forecasts until later in the forecasting period than other analysts.

Original languageEnglish (US)
Pages (from-to)719-739
Number of pages21
JournalJournal of Business Finance and Accounting
Issue number5-6
StatePublished - Jun 2013


  • Analysts' forecast timing
  • Analysts' pessimism
  • Trading commissions

ASJC Scopus subject areas

  • Accounting
  • Business, Management and Accounting (miscellaneous)
  • Finance


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