Do Security Analysts Improve Their Performance with Experience?

We investigate if sell-side security analysts generate more accurate quarterly earnings forecasts and more profitable stock recommendations as their experience following a specific firm increases. We measure firm-specific experience as the number of prior quarters for which the ana- lyst has issued an earnings forecast for the firm. If analysts improve their forecasting performance with repetition, as suggested by the "Learning By Doing" (LBD) model, an analyst's earnings forecasts will become more accurate with experience.