New research from the Financial Relations Board finds that most sell-side analysts prefer that companies provide earnings guidance.

The FRB said that a survey of more than 180 sell-side analysts, found 77% of the respondents indicated that they prefer when companies provide earnings guidance. Also, if a company does provide guidance, 83% of analysts like to see guidance provided on both revenue and earnings per share; 55% of analysts prefer when both quarterly and annual guidance is provided; 69% of analysts feel it’s a “red flag” when a company stops providing guidance; and, the most frequently cited benefit for companies that provide guidance was “Helps to better manage investor expectations” (cited by 85% of the analysts).

“While the practice of earnings guidance is one of the most controversial issues within the financial community today, the views of sell-side analysts have largely been absent from this debate,” said Claire Koeneman, co-president of FRB, in a news release. “The findings of our survey indicate that the vast majority of sell-side analysts are proponents of earnings guidance, which is in stark contrast to the criticism that earnings guidance has received from individuals and groups outside of the analyst community. In addition to helping companies better manage investor expectations, most sell-side analysts believe that earnings guidance increases the ability of companies to have meaningful dialogue with the investment community about the key drivers that will affect future financial performance.”

“The comments we received from analysts indicated that companies that provide earnings guidance are viewed as having a better handle on their operations and a stronger understanding of their marketplace, which helps promote confidence within the investment community,” said Kathy Waller, co- president of FRB. “This survey provides valuable insight into the preferences of sell-side analysts that can be instrumental in helping companies enhance their communication with Wall Street in ways that will have a positive impact on stock valuation.”