Panic herding: Analysts' COVID-19 experiences and the interpretation of earnings news

Matteo Vacca

Journal of Economics and Business, 2024, vol. 132, issue C, No S0148619524000481

Abstract: This paper examines how local experiences of the COVID-19 pandemic affect sell- side analysts’ interpretation of earnings news. By exploiting the 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 the pandemic having a first-order effect on analysts’ risk attitudes, rather than on the bias of their stated expectations.

Keywords: Analysts; COVID-19; Earnings news; Forecast boldness (search for similar items in EconPapers)
JEL-codes: G24 G41 M41 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jebusi:v:132:y:2024:i:c:s0148619524000481

DOI: 10.1016/j.jeconbus.2024.106206

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