Does forecast accuracy matter to security analysts?

We investigate if earnings forecast accuracy matters to security analysts b y examining its association with analyst turnover. Controlling for firm- an d time-period effects, forecast horizon and industry forecasting experience , we find that an analyst is more likely to turn over if his forecast accur acy is lower than his peers. We find no association between an analyst's pr obability of turnover and his absolute forecast accuracy. We also investiga te another observable measure of the analyst's performance, the profitabili ty of his stock recommendations. There is no statistical relation between t he absolute or relative profitability of an analyst's stock recommendations and his probability of turnover, We interpret our findings as indicating t hat forecast accuracy is important to analysts.