The Rewards for Meeting or Beating Managers' Own Earnings Guidance Journal Articles

abstract

• SYNOPSIS This study documents a stock return premium for meeting or beating management's own earnings guidance (MBMG) that is separate and distinct from the premium for meeting or beating analysts' earnings forecasts (MBAF) documented in prior literature. Cross-sectional analyses reveal that the MBMG premium relative to the MBAF premium increases when management guidance is more informative. We also find that MBMG is incrementally informative about a firm's future performance after considering MBAF. Our findings suggest that investors consider management earnings guidance to be a performance threshold in addition to analyst earnings forecasts when forming earnings expectations. Data Availability: All data are available from public databases identified in the paper. JEL Classifications: D84; G14; G17; M41.

authors

• Hui, Kai Wai
• Liu, Alfred
• Zhang, Yao

status

• published 

publication date

• March 1, 2021

has subject area

• 1501 Accounting, Auditing and Accountability (FoR)
• Accounting (Science Metrix)

published in

• Accounting Horizons  Journal

keywords

• ASSOCIATION
• Business & Economics
• Business, Finance
• CREDIBILITY
• EXPECTATIONS
• FORECAST ACCURACY
• MARKET REWARDS
• MATTER
• REVISIONS
• Social Sciences
• management guidance
• market premium
• meeting or beating expectations

Digital Object Identifier (DOI)

• 10.2308/horizons-16-059

start page

• 87

end page

• 103

volume

• 35

issue

• 1