Revisions of analysts' earnings expectations during the COVID-19 crisis

Abstract

This research explains the way the analysts revised their earnings forecasts during the COVID-19 pandemic. It analyzes the way analysts modified their estimates, according to different pre-crisis firm's criteria such as the liquidity condition of the firm, the ESG rating or its activity sector. The study also shows how they considered the evolution of the crisis regarding the number of coronavirus cases and deaths and the volatility of the market (using the VIX index) to make their revisions. The last part of the research focuses on the over or under reaction of analysts by comparing EPS estimates to realized estimates for 2020 and 2021.