Title: How accurately did financial analysts anticipate impact and recovery from the COVID-19 crisis?

Authors: Peter Kotzian

Addresses: Department of Business Administration and Economics, University of Düsseldorf, Universitätsstr. 1, 40225 Düsseldorf, Germany

Abstract: This paper analyses how financial analysts perceived the impact of the COVID-19 pandemic on European firms and how accurate their perceptions were. Analysts' earnings estimates initially reacted strongly to the pandemic, expecting sharp drops in earnings. Earnings for 2020 were seen as being affected much more than earnings in 2021. Analysts perceived substantial differences among countries and industries in terms of the pandemic's economic impact. For some industries, like automobiles, analysts expected a recovery and a catch-up effect in 2021. For others, like tourism, the economic losses of 2020 were seen as lost for good. Tracking earnings estimates shows that analyst's initial estimates were substantially revised over the course of the pandemic. Comparing estimated and actual earnings indicates that for long periods, analysts' estimates were in some cases far off the earnings ultimately realised. There is no indication that analysts' earnings estimates responded to COVID-19-related events or national-level policies.

Keywords: COVID-19; stock market; earnings estimates; economic recovery; financial analysts.

DOI: 10.1504/IJFMD.2025.151609

International Journal of Financial Markets and Derivatives, 2025 Vol.10 No.2, pp.87 - 110

Received: 02 Feb 2024
Accepted: 01 Oct 2024
Published online: 10 Feb 2026 *

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