The Effect of Experience on Security Analyst Underreaction, Journal of Accounting and Economics
We examine whether analysts more fully incorporate prior earnings and returns information in their current quarter forecasts as their experience following a firm increases. We measure analyst firm-specific forecasting experience as the number of prior quarters the analyst has issued an earnings forecast for the firm. We find that analysts underreact to prior earnings information less as their experience increases, suggesting one reason why analysts forecast earnings more accurately with experience.
Michael Mikhail, Beverly Walther, Richard Willis
Mikhail, Michael, Beverly Walther, and Richard Willis. 2003. The Effect of Experience on Security Analyst Underreaction. Journal of Accounting and Economics. 35(1): 101-116.