Factors Affecting Analyst Forecast Accuracy: Review of Literature

Abstract

Studies related to the forecasts of the financial analysts have significantly increased in recent years. The topic attracted the attention of the researchers as the accuracy of analyst forecasts have a very high importance to the firms and to general public for taking decisions relating to the stock market. This paper investigates in the available research to identify the factors, which affect the accuracy of the financial analyst forecasts. Several factors have been found. While some factors have a positive relationship with the accuracy of analyst forecasts, some others have a negative relationship. However, some other factors have a varied relationship with the accuracy of analyst forecast. A thorough analysis of these factors will guide firms and general public to take the more precise stock decisions.