Abstract:This paper selects samples of 2007-2009 annual analyst earnings forecasts of EPS, measures the impact of factors to forecast errors, focusing on conflict of interests of analysts and fund managers. Using multiple linear regression model and binary choice logit model, the results show earnings forecast errors of key holder stocks of mutual funds are higher than other stocks, but the error does not come from the optimistic tendency, but from the pessimistic tendency. Conflict of interest between analysts and fund managers has slight impact on forecast errors. Difficulty to grasp the situation of mutation earnings is an important factor.