Journal of Financial Economics Vol. 33 No. 2 1993
A reexamination of analysts' earnings forecasts for takeover targets
Abstract
We examine analysts' earnings forecasts for a sample of takeover targets and document that the announcement-month forecasts are systematically revised upward, supporting the hypothesis that a takeover announcement conveys favorable information about the target firm. In addition, we find that abnormal forecast revisions of future stand-alone earnings are significantly greater for targets with low Tobin's q-ratios relative to targets with high q-ratios, lending further support to the information hypothesis. Finally, we provide evidence that managerial resistance to the takeover does not destroy value. Our results are in direct contrast to Pound (1988).
- DOI
- 10.1016/0304-405x(93)90004-u
- Volume
- 33
- Issue
- 2
- Pages
- 201-225
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref