Seohyun Lee, Forecast disagreement about firm-level profitability and uncertainty, Pacific-Basin Finance Journal, Volume 97, 2026, 103092,

https://doi.org/10.1016/j.pacfin.2026.103092

The paper introduces a firm-level uncertainty measure based on analysts’ forecast disagreement, departing from volatility-based proxies. The cross-sectional dispersion in analysts’ expectations about firm profitability reflects ex-ante uncertainty regarding firms’ future fundamental. The study adopts a fixed-horizon forecast approach that is comparable to the macro-level uncertainty measures constructed from professional forecast surveys.

The main findings:

📘Higher firm-level uncertainty reduces investment, with stronger effects for firms facing greater irreversibility. 

📙Uncertainty shocks also discourage sales, employment, and R&D, and affect financial decisions—firms reduce debt and increase payouts when uncertainty rises.

Free access link available until March 27, 2026: https://authors.elsevier.com/a/1mZLe,L5lksQu3