
Customer satisfaction and financial analysts earnings forecast errors
Ramond, Olivier; Casta, Jean-François; Ngobo, Paul Valentin (2009), Customer satisfaction and financial analysts earnings forecast errors. https://basepub.dauphine.fr/handle/123456789/3185
View/ Open
Type
Document de travail / Working paperDate
2009Publisher
Université Paris-Dauphine
Series title
Working Papers Chaire Finance d'entreprise Dauphine - FBFSeries number
2009-1Published in
Paris
Pages
48
Metadata
Show full item recordAbstract (EN)
This paper examines the relevance of customer satisfaction for the financial analysts when preparing their earnings forecasts. We draw on theory in marketing to predict how customer satisfaction should be associated with earnings forecasts and forecast errors. We assembled a dataset of companies studied in the American Customer Satisfaction Index - ACSI (University of Michigan), which also appear on the Institutional Brokers Estimate System (I/B/E/S) files. We control for factors known to influence the earnings forecasts, such as firm profitability and risk, as well as potential unobservable factors using a Mixed-effects regression. We find that customer satisfaction has a negative association with the analysts’ forecast errors. More specifically, both levels and changes in ACSI are associated with higher levels of Actual Earnings per Share (EPS) and higher levels of analysts’ earnings forecasts, making the analysts’ forecasts to be closer to the business reality. The robust impact of customer satisfaction on forecast earnings and errors suggests that analysts who undervalue customer satisfaction information may deprive themselves of an important proxy of non-financial information.Subjects / Keywords
Multilevel Modelling; Customer Satisfaction; Financial Analysts; Forecast ErrorsRelated items
Showing items related by title and author.
-
Casta, Jean-François; Ramond, Olivier; Ngobo, Paul Valentin (2009) Communication / Conférence
-
Ngobo, Paul Valentin; Casta, Jean-François; Ramond, Olivier (2012) Article accepté pour publication ou publié
-
Casta, Jean-François; Ramond, Olivier (2016) Chapitre d'ouvrage
-
Ramond, Olivier; Casta, Jean-François; Lin, Stephen (2007) Communication / Conférence
-
Escaffre, Lionel; Casta, Jean-François; Ramond, Olivier (2007) Communication / Conférence