Panic herding: analysts' Covid-19 experiences and the interpretation of earnings news

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isbn9789526402048.pdf (1.11 MB)

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School of Business | D4 Julkaistu kehittämis- tai tutkimusraportti tai -selvitys
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Date

2020

Department

Rahoituksen laitos
Department of Finance

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Language

en

Pages

65

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Aalto University publication series BUSINESS + ECONOMY, 4/2020

Abstract

This paper examines how local experiences of the Covid-19 pandemic affect sell-side analysts’ processing of earnings news. Exploiting variation in the intensity and timing of local outbreaks, I show that analysts who are more exposed to the virus tend to herd more closely with the consensus forecast. However, I find no evidence of increases in forecast pessimism. The data are consistent with the intensity of exposure to pandemic having a first order effect on analysts’ risk attitudes, rather than on the bias of their stated expectations.

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analysts, Covid-19, earnings news, forecast boldness, risk attitudes

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https://urn.fi/URN:ISBN:978-952-64-0204-8

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[work] Kauppakorkeakoulu / BIZ