Analysis of the relationship between temporal and behavioral aspects of the analyst's forecasting accuracy

Abstract

The study analyzed the relationship between optimism, anchoring, overconfidence, representativeness, realism, commonality and time, with the accuracy in the profit forecast of analysts. Publicly traded Brazilian companies were considered in 2019, and correlation tests, mean differences and multiple regression analyses were applied. The results indicated that accuracy is negatively influenced by optimism and positively by anchoring and commonality. In addition, the uncertainty present in the distance between the forecast issued and the disclosure of earnings per share also negatively influences the accuracy of analysts. Additionally, it was found that fair value, profitability, issuing ADRs and self-regulated sector, are aspects related to greater accuracy. Thus, the research contributes to the literature by linking behavioral and temporal aspects to financial ones, as well as by signaling the importance of analysts' forecasting models to consider behavioral aspects in their information technologies.

Keywords

• Analyst's forecast
• Behavioral biases
• Forecast time