Bridge over ocean
1 July 2011 Financial Analysts Journal Volume 67, Issue 4

What Factors Drive Analyst Forecasts?

  1. Boris Groysberg
  2. Paul Healy
  3. Nitin Nohria
  4. George Serafeim

Using survey data to judge how analyst forecasts are related to evaluations of companies’ industry competitiveness, strategic choices, and internal capabilities, the authors found that analyst forecasts are associated with many of the factors that money managers rate as important in their assessments of analyst contributions. They also found wide variation in ratings consistency across variables among analysts covering the same company. On average, consistency is higher for sell-side analysts than for buy-side analysts.

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