TY - JOUR T1 - Analyst Industry Diversification and Earnings Forecast Accuracy JF - The Journal of Investing SP - 7 LP - 14 DO - 10.3905/joi.2005.517169 VL - 14 IS - 2 AU - Kimberly Dunn AU - Siva Nathan Y1 - 2005/05/31 UR - https://pm-research.com/content/14/2/7.abstract N2 - This study of the effects of both number of business segments followed by an analyst and analyst industry diversification on individual analyst earnings forecast accuracy applies a new measure of an analyst's diversification. The measure uses a combination of the number of two-digit SIC code business segments reported by the company and the number of two-digit SIC code business segments followed by the individual analyst to calculate an analyst's diversification measure for each analyst-company combination. The analysis indicates that as an analyst follows more business segments and a greater diversification of industry, his earnings forecasts are significantly less accurate. These results have implications for researchers who use analyst earnings forecasts in studies; investors who use forecasts for company valuation; and brokerage firms in evaluating individual analysts and assigning analysts to companies. ER -