Strategically timing the desirable forecast revisions with investors' attention would enhance analysts influence on the market. In this study, I document that analysts show off downward/pessimistic and more biased forecast revisions on weekdays whereas hide upward/optimistic and less biased forecast revisions on weekends. This behavior is more pronounced in the period before the earnings announcement date, during which it facilitates firm managers' meeting or beating expectation. Specifically, investors underestimate earnings of firms with more salient pessimistic forecast revisions and invisible optimistic forecast revisions, and thus overreact to such firms' earnings announcement. The results suggest that analysts shape market expectation by utilizing investor behavioral bias and the...[ Read more ]

Strategically timing the desirable forecast revisions with investors' attention would enhance analysts influence on the market. In this study, I document that analysts show off downward/pessimistic and more biased forecast revisions on weekdays whereas hide upward/optimistic and less biased forecast revisions on weekends. This behavior is more pronounced in the period before the earnings announcement date, during which it facilitates firm managers' meeting or beating expectation. Specifically, investors underestimate earnings of firms with more salient pessimistic forecast revisions and invisible optimistic forecast revisions, and thus overreact to such firms' earnings announcement. The results suggest that analysts shape market expectation by utilizing investor behavioral bias and then bring up the market-base benefits to firm managers.