Analysts’ EPS-Decreasing Exclusions and Target Price Forecasts

References

• Asquith P, Mikhail MB, Au AS (2005) Information content of equity analyst reports. J. Financial Econom. 75(2):245–282.Crossref, Google Scholar
• Baik B, Farber D, Petroni K (2009) Analysts’ incentives and street earnings. J. Accounting Res. 47(1):45–69.Crossref, Google Scholar
• Balakrishnan K, Shivakumar L, Taori P (2021) Analysts’ estimates of the cost of equity capital. J. Accounting Res. 71(2–3):1–27.Google Scholar
• Barth M, Gow I, Taylor D (2012) Why do pro forma and street earnings not reflect changes in GAAP? Evidence from SFAS 123R. Rev. Accounting Stud. 17(3):526–562.Crossref, Google Scholar
• Beardsley E, Mayberry M, McGuire S (2021) Street vs. GAAP: Which effective tax rate is more informative? Contemporary Accounting Res. 38(2):1310–1340.Crossref, Google Scholar
• Bentley JW, Christensen TE, Gee KH, Whipple BC (2018) Disentangling managers’ and analysts’ non-GAAP reporting. J. Accounting Res. 56(4):1039–1081.Crossref, Google Scholar
• Bhattacharya N, Black EL, Christensen TE, Larson CR (2003) Assessing the relative in formativeness and permanence of pro forma earnings and GAAP operating earnings. J. Accounting Econom. 36(1–3):285–319.Crossref, Google Scholar
• Bilinski P, Lyssimachou D, Walker M (2013) Target price accuracy: International evidence. Accounting Rev. 88(3):825–851.Crossref, Google Scholar
• Black DE, Christensen TE (2009) US managers’ use of ‘pro forma’ adjustments to meet strategic earnings targets. J. Bus. Finance Accounting 36(3–4):297–326.Crossref, Google Scholar
• Black DE, Christensen TE, Ciesielski JT, Whipple BC (2018) Non-GAAP reporting: Evidence from academia and current practice. J. Bus. Finance Accounting 45(3–4):259–294.Crossref, Google Scholar
• Botosan CA, Plumlee MA (2002) A re‐examination of disclosure level and the expected cost of equity capital. J. Accounting Res. 40(1):21–40.Crossref, Google Scholar
• Bradshaw MT (2002) The use of target prices to justify sell‐side analysts’ stock recommendations. Accounting Horizons 16(1):27–41.Crossref, Google Scholar
• Bradshaw MT (2004) How do analysts use their earnings forecasts in generating stock recommendations? Accounting Rev. 79(1):25–50.Crossref, Google Scholar
• Bradshaw MT (2009) Analyst information processing, financial regulation, and academic research. Accounting Rev. 84(4):1073–1083.Crossref, Google Scholar
• Bradshaw MT (2011) Analysts’ forecasts: What do we know after decades of work? Working paper, Boston College, Chestnut Hill, MA.Google Scholar
• Bradshaw MT, Sloan R (2002) GAAP versus the street: An empirical assessment of two alternative definitions of earnings. J. Accounting Res. 40(1):41–66.Crossref, Google Scholar
• Bradshaw MT, Brown LD, Huang K (2013) Do sell-side analysts exhibit differential target price forecasting ability? Rev. Accounting Stud. 18(4):930–955.Crossref, Google Scholar
• Bradshaw MT, Huang K, Tan H (2019) The effects of analyst-country institutions on biased research: Evidence from target prices. J. Accounting Res. 57(1):85–120.Crossref, Google Scholar
• Bradshaw MT, Christensen TE, Gee KH, Whipple BC (2018) Analysts’ GAAP earnings forecasts and their implications for accounting research. J. Accounting Econom. 66(1):46–66.Crossref, Google Scholar
• Bratten B, Larocque S, Yohn T (2023) Filling in the GAAPs in individual analysts’ street earnings forecasts. Management Sci. 69(8):4790–4809.Link, Google Scholar
• Bratten B, Larocque S, Yohn T (2024) On the informativeness of expected and unexpected exclusions from street earnings. Contemporary Accounting Res. 41(2):809–841.Crossref, Google Scholar
• Brav A, Lehavy R (2003) An empirical analysis of analysts’ target prices: Short-term informativeness and long-term dynamics. J. Finance 58(5):1933–1968.Crossref, Google Scholar
• Brown L, Larocque S (2013) I/B/E/S reported actual EPS and analysts’ inferred actual EPS. Accounting Rev. 88(3):853–880. Google Scholar
• Brown LD, Sivakumar K (2003) Comparing the value relevance of two operating income measures. Rev. Accounting Stud. 8(4):561–572.Crossref, Google Scholar
• Chen S, Matsumoto DA (2006) Favorable versus unfavorable recommendations: The impact on analyst access to management‐provided information. J. Accounting Res. 44(4):657–689.Crossref, Google Scholar
• Choi Y, Lin S, Walker M, Young S (2007) Disagreement over the persistence of earnings components: Evidence on the properties of management-specific adjustments to GAAP earnings. Rev. Accounting Stud. 12(4):595–622.Crossref, Google Scholar
• Curtis AB, McVay SE, Whipple BC (2014) The disclosure of non-GAAP earnings information in the presence of transitory gains. Accounting Rev. 89(3):933–958.Crossref, Google Scholar
• Da Z, Schaumburg E (2011) Relative valuation and analyst target price forecasts. J. Financial Markets 14(1):161–192.Crossref, Google Scholar
• Da Z, Engelberg J, Gao P (2011) In search of attention. J. Finance 66(5):1461–1499.Crossref, Google Scholar
• Dechow P, You H (2020) Understanding the determinants of analyst target price forecasts. Accounting Rev. 95(6):125–149.Crossref, Google Scholar
• De Franco G, Zhou Y (2009) The performance of analysts with a CFA designation: The role of human-capital and signaling theories. Accounting Rev. 84(2):383–404.Crossref, Google Scholar
• Donelson DC, Koutney CQ, Mills LF (2024) Nonrecurring income taxes. Rev. Accounting Stud. 29(2):1741–1793.Crossref, Google Scholar
• Doyle JT, Jennings JN, Soliman MT (2013) Do managers define non-GAAP earnings to meet or beat analyst forecasts? J. Accounting Econom. 56(1):40–56.Crossref, Google Scholar
• Doyle JT, Lundholm RJ, Soliman MT (2003) The predictive value of expenses excluded from pro forma earnings. Rev. Accounting Stud. 8(2):145–174.Crossref, Google Scholar
• Ertimur Y, Sunder J, Sunder S (2007) Measure for measure: The relation between forecast accuracy and recommendation profitability of analysts. J. Accounting Res. 45(3):1–40. Crossref, Google Scholar
• Gleason CA, Johnson WB, Li H (2013) Valuation model use and the target price performance of sell‐side equity analysts. Contemporary Accounting Res. 30(1):80–115.Crossref, Google Scholar
• Groysberg B, Healy PM, Maber DA (2011) What drives sell‐side analyst compensation at high‐status investment banks? J. Accounting Res. 49(4):969–1000.Crossref, Google Scholar
• Gu Z, Chen T (2004) Analysts’ treatment of nonrecurring items in street earnings. J. Accounting Econom. 38:129–170.Crossref, Google Scholar
• Ham CG, Kaplan Z, R, Lemayian ZR (2022) Rationalizing forecast inefficiency. Rev. Accounting Stud. 27(1):313–343.Crossref, Google Scholar
• Hong H, Kubik JD (2003) Analyzing the analysts: Career concerns and biased earnings forecasts. J. Finance 58(1):313–351.Crossref, Google Scholar
• Hsu C, Kross W (2011) The market pricing of special items that are included in versus excluded from street earnings. Contemporary Accounting Res. 28(3):990–1017.Crossref, Google Scholar
• Huang S, Tan H, Wang X, Yu C (2023) Valuation uncertainty and analysts’ use of DCF models. Rev. Accounting Stud. 28(2):827–861.Crossref, Google Scholar
• Irvine PJ (2000) Do analysts generate trade for their firms? Evidence from the Toronto stock exchange. J. Accounting Econom. 30(2):209–226.Crossref, Google Scholar
• Kolev K, Marquardt C, McVay S (2008) SEC scrutiny and the evolution of non-GAAP reporting. Accounting Rev. 83(1):157–184.Crossref, Google Scholar
• Lambert RA (2004) Discussion of analysts’ treatment of non-recurring items in street earnings and loss function assumptions in rational expectations tests on financial analysts’ earnings forecasts. J. Accounting Econom. 38:205–222.Crossref, Google Scholar
• Lin HW, McNichols MF (1998) Underwriting relationships, analysts’ earnings forecasts and investment recommendations. J. Accounting Econom. 25(1):101–127.Crossref, Google Scholar
• McCann D (2018) SEC intensifies on non-GAAP metrics. CFO.com (October 23), https://www.cfo.com/news/sec-intensifies-focus-on-non-gaap-metrics/658509/.Google Scholar
• Mikhail M, Walther B, Willis R (2003) The effect of experience on security analyst under-reaction. J. Accounting Econom. 35(1):101–116.Crossref, Google Scholar
• Mohanram P, White B, Zhao W (2020) Stock-based compensation, financial analysts, and equity overvaluation. Rev. Accounting Stud. 25(3):1040–1077.Crossref, Google Scholar
• Palley A, Steffen TD, Zhang F (2024) The effect of dispersion on the informativeness of analyst target prices. Management Sci. 71(3):2264–2288.Google Scholar
• Sherman E (2020) Minding the GAAP: Companies are using a wider range of accounting metrics to inform investors—And sometimes mislead them. Fortune (January 24), https://fortune.com/2020/01/24/gaap-pro-forma-reporting/.Google Scholar
• Shroff N, Verdi R, Yu G (2014) Information environment and the investment decisions of multinational corporations. Accounting Rev. 89(2):759–790.Crossref, Google Scholar
• Whipple B (2016) The great unknown: Why exclude ‘other’ items from non-GAAP earnings calculations in a post-Reg G world? Working paper, University of Georgia, Athens.Google Scholar