RT Journal Article
SR Electronic
T1 Consensus Forecasts of Corporate Earnings Changes and the Performance of Swiss Stocks
JF The Journal of Investing
FD Institutional Investor Journals
SP 19
OP 26
DO 10.3905/joi.1999.319386
VO 8
IS 1
A1 Andreas Dische
A1 Heinz Zimmermann
YR 1999
UL https://pm-research.com/content/8/1/19.abstract
AB This study examines the behavior of stock prices around the publication of earnings revisions based on consensus forecasts for Swiss companies. Monthly consensus updates and daily abnormal returns are analyzed around announcement dates. Significant abnormal returns can be observed before and after announcement dates. The magnitude of the earnings revision is strongly and positively related to the abnormal returns in the fifty days prior to the publication date of the consensus. Statistically significant abnormal returns can be earned in the postannouncement period only for the portfolio of the stocks exhibiting the most positive earnings revision. Thus, the consensus can be used as valuable investment advice. The effect is particularly strong for stocks not included in the Swiss Market index.