Research On Optimism In Securities Analysts’ Earnings Forecasts

As a very important way to deliver information to the investment institutions and investors, securities analysts’ earnings forecast report is also the main service to the investment institutions and investors. As one of the important factors that affect the accuracy of the securities analysts’ earnings forecast, the optimistic tendency of the securities analysts’ earnings forecast has gradually become one of the hot spots of the scholars’ research.In this paper, the tendency of securities analysts’ earnings forecasts from 2009 to 2013 in Wind database were selected as a research object. The formation mechanism of the optimistic tendency of the securities analysts’ earnings forecast in our country was expounded and then an analysis combined to the herd behavior theory, overreaction theory, overconfidence theory and asymmetric information theory was made which considered the reason of the optimistic tendency were conflict of interest and cognitive bias. Finally, an empirical test was done to approve this point.At first, it was found that the securities analysts in our country have shown a clear positive trend in their earnings forecasts from 2010 to 2013, in addition to a slightly pessimistic trend forecast in 2009, through the descriptive statistical analysis. After that, this paper explored the behavior characteristics of the optimistic tendency of the securities analysts’ earnings forecast in our country through five influence factors by the multiple regression models. The five influence factors were that the number of the forecast organizations of the same company in the same year, whether the listed company was profitable, the size of the forecast organizations, the years that the listed company had been forecasted by the same organizations and whether the forecast organization is the corporation’s first lead underwriter. It was found that the more forecast organizations to forecast one company a year, the lower optimistic degree of earnings forecasts was got; compared to the profit forecast of profit companies, the optimistic degree of the profit forecast of loss companies which securities analysts showed was higher; the regression coefficient of securities analyst institution size is only 0.009142,means that it has little influence on the optimism degree of securities analyst earnings forecast; the longer the listed company forecasted by the same organizations, the higher optimistic degree of earnings forecasts was got; when the prediction organization is the listing corporation’s first lead underwriter, the underwriter securities analyst’s earnings forecasts on the listing corporation is less optimistic.The innovation of this paper is that it is not only an independent analysis of interest conflict or cognitive bias in the optimism tendency of securities analysts’ earnings forecast, but to further analyze the combined influence to the optimistic tendency of the securities analysts’ earnings forecasts. This can better explain how the conflict of interest and cognitive bias can lead to optimistic tendency of securities analyst earnings forecast.