Earnings forecasting revolutionizes capital markets, predicting stock prices with precision.
Earnings forecasting research has become closely linked to capital markets research since the 1980s. The study explores whether annual earnings can be predicted, how stock prices react to quarterly earnings, and how analysts make earnings expectations. It also looks at the impact of earnings forecasting on market studies like 'earnings response coefficient' and 'post-earnings announcement drift'. The research suggests that earnings forecasting plays a crucial role in understanding market expectations and stock price movements.