The Relative Accuracy of Analysts' Published Forecasts Versus Whisper Forecasts Surrounding the Adoption of Regulation FD

This paper examines the accuracy and information content of analysts' published forecasts relative to whisper forecasts before and after the effective date of Regulation Fair Disclosure (Reg FD). We find that whisper forecasts are generally more accurate than analysts' consensus forecasts in our pre-Reg FD period (consistent with prior literature), but less accurate during the post-Reg FD period. We also find in the post-Reg FD period that analysts' forecast errors earn significantly larger abnormal returns compared to whisper forecast errors. These results suggest that Reg FD has had its desired effect of mitigating private communications from management to market participants.