Do Multi-Year Earnings Forecasts Help Identify Over-Investment for Future Business?
Journal
財務金融學刊
Journal Volume
25
Journal Issue
4
Pages
45-81
Date Issued
2017
Author(s)
Abstract
This study examines the extent to which analyst multi-year earnings forecasts help investors assess values of the firms with substantial fixed and intangible assets. We explore the potential explanations for analysts to provide these forecasts and investigate whether the residual earnings valuation model benefits from incorporating them. Analysts issue more frequently multi-year forecasts for firms with greater investment in property, plant, and equipment, intangible assets, and/or research and development. We also find that given the prevalently adopted near-termed forecasts, analyst multi-year forecasts add significantly to explaining both short- and long-horizoned returns, especially for firms investing heavily for the future.
SDGs
Publisher
Publisher: 臺灣財務金融學會
Type
journal article