The Level and Persistence of Growth Rates  

Oleh:

Chan, Louis K. C. ; Karceski, Jason ; Lakonishok, Josef

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Journal of Finance (EBSCO) vol. 58 no. 2 (Apr. 2003), page 643-684.
Fulltext: p 643.pdf (290.13KB)

Isi artikel

Expectations about long-term earnings growth are crucial to valuation models and cost of capital estimates.We analyze historical long-term growth rates across a broad cross section of stocks using several indicators of operating performance.We test for persistence and predictability in growth.While some ¢rms have grown at high rates historically, they are relatively rare instances. There is no persistence in long-term earnings growth beyond chance, and there is low predictability even with a wide variety of predictor variables. Speci¢ cally, IBES growth forecasts are overly optimistic and add little predictive power.Valuation ratios also have limited ability to predict future growth.

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