A Catering Theory of Earnings Guidance: Empirical Evidence and Stock Market Implications
Zusammenfassung
We propose and test a catering theory of earnings guidance. As predicted by our model, managers cater to reference point dependent investor preferences by issuing excessively optimistic earnings forecasts if their investors have experienced poor stock returns. Moreover, earnings guidance is most biased when managers strongly discount future outcomes, when the stock's payoff uncertainty is high, and when managers face low costs for issuing inaccurate forecasts. Catering via earnings guidance succeeds in moving stock market prices and induces mispricing which is partially corrected around the corresponding final earnings announcement.
Schlüsselwörter
Management Guidance; Catering; Capital Gains Overhang; Stock Mispricing; Behavioral Finance
Zitieren als
Lohmeier, N., & Mohrschladt, H. (2026). A Catering Theory of Earnings Guidance: Empirical Evidence and Stock Market Implications. Journal of Financial and Quantitative Analysis. (accepted / in press (not yet published))Details
Publikationstyp
Forschungsartikel (Zeitschrift)
Begutachtet
Ja
Publikationsstatus
accepted / in press (not yet published)
Jahr
2026
Fachzeitschrift
Journal of Financial and Quantitative Analysis
Sprache
Englisch
ISSN
0022-1090
DOI