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Cited by 574

The DOI matches its Crossref record; 26 of the 26 references it cites were found in a registry or an index.

The Relation between Analysts' Forecasts of Long‐Term Earnings Growth and Stock Price Performance Following Equity Offerings*

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DECHOW, PATRICIA M., HUTTON, AMY P., SLOAN, RICHARD G.·2000·Contemporary Accounting Research
DOI 10.1111/j.1911-3846.2000.tb00908.x
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Abstract

In this paper we evaluate the role of sell‐side analysts' long‐term earnings growth forecasts in the pricing of common equity offerings. We find that, in general, sell‐side analysts' long‐term growth forecasts are systematically overly optimistic around equity offerings and that analysts employed by the lead managers of the offerings make the most optimistic growth forecasts. In additional, we find a positive relation between the fees paid to the affiliated analysts' employers and the level of the affiliated analysts' growth forecasts. We also document that the post‐offering underperformance is most pronounced for firms with the highest growth forecasts made by affiliated analysts. Finally, we demonstrate that the post‐offering underperformance disappears once we control for the overoptimism in earnings growth expectations. Thus, the evidence presented in this paper is consistent with the “equity issue puzzle” arising from overly optimistic earnings growth expectations held at the time of the offerings.

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Metadata

Authors
DECHOW, P. M., HUTTON, A. P., & SLOAN, R. G.
Venue
Contemporary Accounting Research
Publisher
Wiley
Published
2000-03
Volume
17
Issue
1
Pages
1-32
ISSN
  • 0823-9150 (ISSN-L)
  • 1911-3846
DOI
10.1111/j.1911-3846.2000.tb00908.x
OpenAlex
W3125018794
Cited by
574
References
26
FWCI
84.32
Type
journal article
Language
en
Open access
green

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CoChat. (2026). Citation check: The Relation between Analysts' Forecasts of Long‐Term Earnings Growth and Stock Price Performance Following Equity Offerings*. https://app.cochat.ai/papers/10.1111/j.1911-3846.2000.tb00908.x
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DECHOW, P. M., HUTTON, A. P., & SLOAN, R. G. (2000). The Relation between Analysts' Forecasts of Long‐Term Earnings Growth and Stock Price Performance Following Equity Offerings*. Contemporary Accounting Research. https://doi.org/10.1111/j.1911-3846.2000.tb00908.x

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Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.