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Optimist? Javisst!

Blazevic, Filip LU and Thorstensson, Hannes LU (2022) NEKH02 20212
Department of Economics
Abstract
The main objective of this paper is to examine the role of equity research analysts as a source of information to investment decisions by analyzing the accuracy of consensus estimates in the Swedish stock market in 2011-2020. The study expects to provide an overview of the accuracy of consensus estimates and thus contribute to educating investors about when estimates are reliable. The ambition is to identify if, and in that case how, the forecast horizon and company size affects the forecast accuracy. By investigating the level of bias and efficiency of 11 371 revenue and EPS consensus estimates, this study finds that analysts are optimistic, in particular regarding EPS. In addition, this study concludes that the forecast accuracy is... (More)
The main objective of this paper is to examine the role of equity research analysts as a source of information to investment decisions by analyzing the accuracy of consensus estimates in the Swedish stock market in 2011-2020. The study expects to provide an overview of the accuracy of consensus estimates and thus contribute to educating investors about when estimates are reliable. The ambition is to identify if, and in that case how, the forecast horizon and company size affects the forecast accuracy. By investigating the level of bias and efficiency of 11 371 revenue and EPS consensus estimates, this study finds that analysts are optimistic, in particular regarding EPS. In addition, this study concludes that the forecast accuracy is significantly worsened for smaller companies and longer forecast horizons. Lastly, we find that last year's EPS is a more reliable indicator of the future than the consensus estimate for smaller companies. (Less)
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author
Blazevic, Filip LU and Thorstensson, Hannes LU
supervisor
organization
course
NEKH02 20212
year
type
M2 - Bachelor Degree
subject
keywords
Analyst Estimates, Consensus Estimates, Forecast Accuracy, Forecast Error, Forecast Horizon
language
Swedish
id
9074167
date added to LUP
2022-02-03 08:16:00
date last changed
2022-02-03 08:16:00
@misc{9074167,
  abstract     = {{The main objective of this paper is to examine the role of equity research analysts as a source of information to investment decisions by analyzing the accuracy of consensus estimates in the Swedish stock market in 2011-2020. The study expects to provide an overview of the accuracy of consensus estimates and thus contribute to educating investors about when estimates are reliable. The ambition is to identify if, and in that case how, the forecast horizon and company size affects the forecast accuracy. By investigating the level of bias and efficiency of 11 371 revenue and EPS consensus estimates, this study finds that analysts are optimistic, in particular regarding EPS. In addition, this study concludes that the forecast accuracy is significantly worsened for smaller companies and longer forecast horizons. Lastly, we find that last year's EPS is a more reliable indicator of the future than the consensus estimate for smaller companies.}},
  author       = {{Blazevic, Filip and Thorstensson, Hannes}},
  language     = {{swe}},
  note         = {{Student Paper}},
  title        = {{Optimist? Javisst!}},
  year         = {{2022}},
}