Earnings Forecast Revisions based on Bond Rating Changes

Shidler College Distinguished Associate Professor Boochun Jung co-authored an article entitled “When Do Stock Analysts Look to Bond Analysts? Evidence from Earnings Forecast Revisions to Bond Rating Changes” published in Accounting and Business Research. This article examines how stock analysts use information from credit rating change announcements. The authors show that stock analysts rely more on rating downgrades, but not upgrades when they forecast earnings.