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  • July – August 2008
  • Article
  • Financial Analysts Journal

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

By: Boris Groysberg, Paul M. Healy and Craig James Chapman
  • Format:Print
  • | Pages:15
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Abstract

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

Citation

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.
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About The Authors

Boris Groysberg

Organizational Behavior
→More Publications

Paul M. Healy

Accounting and Management
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More from the Authors
  • Now You See Me, Now I'm Gone By: Boris Groysberg, Derek Haas and Eric Lin
  • The Dutch East India Company (VOC) By: Sophus A. Reinert, Paul M. Healy and Robert Fredona
  • Can AI Really Help You Sell? By: Jim Dickie, Boris Groysberg, Benson P. Shapiro and Barry Trailer
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