Article | Financial Analysts Journal | July – August 2008

Buy-Side vs. Sell-Side Analysts' Earnings Forecasts

by Boris Groysberg, Paul M. Healy and Craig James Chapman


We compare the earnings forecast performance of analysts at a large buy-side firm to that of sell-side analysts. Our tests show that the buy-side firm analysts make more optimistic and less accurate forecasts than their counterparts on the sell-side. These performance differences appear to be partially explained by the buy-side's higher retention of poor-performing analysts and by differences in performance benchmarks used to evaluate buy- and sell-side analysts.

Keywords: Motivation and Incentives; Business Earnings; Forecasting and Prediction; Performance Effectiveness;


Groysberg, Boris, Paul M. Healy, and Craig James Chapman. "Buy-Side vs. Sell-Side Analysts' Earnings Forecasts." Financial Analysts Journal 64, no. 4 (July–August 2008): 25 – 39.