THE EFFECTS OF INTANGIBLES IN THE FINANCIAL
ANALYSTS' FORECASTS

Name: Gilmar Gomes Gazoni Junior
Type: MSc dissertation
Publication date: 20/12/2017
Advisor:

Namesort descending Role
Eduardo José Zanoteli Advisor *

Examining board:

Namesort descending Role
Eduardo José Zanoteli Advisor *
Hudson Fernandes Amaral External Examiner *
Jose Elias Feres de Almeida Internal Examiner *

Summary: This study investigates the relationship between intangibles and financial
analysts’ forecasts and was motivated by the suggestion on literature, that
intangibles can influence analysts' predictions, even though there is no
consensus as to the direction of such influence. In this way, we tried to
contribute by adding to the discussion evidence through other approaches
adding the use of another proxy (Goodwill) of intangible and also the
segregation of companies by the degree of intangibility and thus, observing the
behavior for each intangible studied as well as the same proxy when to a
greater or lesser degree. The general objective is to investigate the relationship
between intangible assets and forecasts of financial analysts and specifically to
analyze whether intangible assets influence the accuracy and dispersion of
forecasts. To achieve the research objectives was used a sample of US nonfinancial
firms from 1995 to 2016, and the main results found evidences that
investments in R&D and recognized intangible assets are capable of improving
analysts' forecasts. However, Goodwill was negatively related to analysts'
forecasts by reducing accuracy and increasing the dispersion forecasts. In
addition, when analyzed by the degree of intangibility, companies with a lower
degree of R&D investment showed a reduction in accuracy and an increase in
the dispersion of forecasts, while companies with a higher degree of investment
in R&D showed an increase in accuracy and a reduction in the dispersion of
forecasts. Thus, it was evidenced that there is an association between
intangibles and predictions, but it is emphasized that the sign of this association
depends on the intangible in question and also degree of intangibility.

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