Factors that attenuate the negative stock price response to missing analyst forecasts

Prior research consistently finds a negative stock price reaction to missing analyst forecasts that is separate from the magnitude of the earnings surprise. We examine firm and economy-wide characteristics that we predict will attenuate this stock price response. We find that the penalty to missing analyst forecasts is lower for firms reporting a loss, larger firms, and firms that have more noise in their earnings expectations. In contrast, the penalty is more severe for firms with high intangible intensity and that experience a stock price run-up prior to the earnings announcement. We also find mixed results suggesting that the stock price penalty to missing forecasts is less severe during periods of high macroeconomic growth. A Time of Forgiveness: Factors that Attenuate the Negative Stock Price Response to Missing Analyst Forecasts.