The time profile of analysts' earnings forecasts.

The objective of this thesis is to investigate the part played by analysts in incorporating information about earnings into stock-prices. Chapter 1 deals with the theoretical background. Chapter 2 presents the empirical evidence that accounting earnings have Information value to the market. Evidence from chapter 3 indicates that information contained in analysts' earnings forecasts Is incorporated into stock-prices. Assuming this to be correct, studying the time-profile of analysts’ earnings forecasts gives an Insight into the impounding process. Chapter 4 presents statistical methods for evaluating forecast accuracy and rationality. Chapter 5 reviews the empirical evidence relating to the accuracy and rationality of analysts' earnings forecasts. Chapters 6 presents the hypotheses to be tested in the empirical study, and the experimental design, Chapter 7 presents the results and discusses them in the light of other empirical studies. Shortcomings of the empirical study and suggested further research are then presented.