Factors affecting earnings forecast revisions for the buy-side and sell-side analyst

A study examines the role that job function plays in the type and importance of information used by financial analysts in revising a forecast of earnings per share (EPS). Responses to a questionnaire are compared based upon whether the analyst is from the buy- or sell-side. The results indicate that sell-side analysts consider private information from management significantly more important than buy-side. On the other hand, buy-side analysts find other analysts' opinions, market reaction and annual reports and 10-Ks to be more important. These findings suggest that the 2 groups of analysts consider the type and importance of information differently in revising EPS forecasts.