Is Analyst' Forecast Revision More Valuable In High Policy Uncertainty Times

Analysts play a vital role in the information transmission of capital market,they are the medium of information transferring and information interpretation between investors and the listed company.Depending on their professional knowledge and comparative advantage on gathering information,analysts will interpret and evaluate the accounting information.Thus,investors pay close attention to earning forecasts and investment rating made by analysts.The dissertation compile analyst' earning forecast revision on A shares of Chinese market from Jan 2011 to Dec 2017,then studying the value of earning forecast revision in high policy uncertainty times.First,the dissertation conduct a regression analysis on investment rating,investment rating revision,earning forecast revision and revision direction,the regression analysis shows that investment rating,investment rating revision and earning forecast revision have a positive impact on rate of return.Second,the dissertation study the value of investment rating revision uder different economic situation.The analysts' upgrade is more instructive in high policy uncertainty time as well as analysts' downgrade.Lastly,the dissertation study the value of earning forecast revision under different economic situation.The conclusion is that in Chinese stock market,the upgrade of earning forecast is more instructive in high policy uncertainty time,but downgrade of earning forecast does not have a significant difference.Further,this paper finds that the relative accuracy of analysts' earnings forecasts increases when the policy uncertainty is high,which is the reason why analysts'earnings forecasts are more influential when they are upgraded.