Earnings Forecasts and the Business Cycles: Evidence from firms in Brazil.
Earnings forecast. Analyst’s forecast. Business Cycles. Signaling Theory.
Considering the role of market analysts as information intermediaries between companies and investors, as agents capable of reducing information asymmetry and contributing to the functioning of the capital market, this research project aims to analyze the influence of the economic environment on forecasts for earnings reported by market analysts. For this, information will be collected about earnings forecasts published by market analysts and accounting and financial information of companies that trade their shares on B3, as well as information regarding the economic environment during the period 2000 to 2020, through the base of data from Eikon Refinitiv. The properties of earnings forecasts to be tested in this study are: (a) frequency of forecasts; (b) forecast bias (pessimism/optimism); and (c) accuracy of forecasts, while economic cycles will be measured through variations in GDP, to classify cycles into four phases: expansion, recession, contraction and recovery, according to Schumpeter. For data analysis, it is proposed the estimation of three econometric models using the technique of statistical modeling of unbalanced panel data.