Measuring inconsistency in analyst reports

Jun Wang and Xing Chen

Economics Letters, 2025, vol. 247, issue C

Abstract: This study improves existing methods for measuring inconsistency in analyst reports by incorporating the standard deviations of standardized earnings forecasts, target prices, stock recommendations, and textual sentiment. We find that report inconsistency is driven by forecast complexity and analysts’ independence, with inconsistent reports exhibiting higher forecast errors and stronger short-term market reactions. Moreover, we reconcile conflicting conclusions in the literature, showing that different methods of measuring report inconsistency lead to varying research outcomes.

Keywords: Analysts; Inconsistency; Earnings forecasts; Target prices; Recommendations; Textual sentiment (search for similar items in EconPapers)
JEL-codes: G14 G24 M41 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:247:y:2025:i:c:s0165176524006360

DOI: 10.1016/j.econlet.2024.112152

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