What Drives the Value of Financial Analysts’ Advice? The Role of Earnings and Growth Forecasts
SSRN Electronic Journal, Page: 1-41
2023
- 1,338Usage
- 4Captures
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Example: if you select the 1-year option for an article published in 2019 and a metric category shows 90%, that means that the article or review is performing better than 90% of the other articles/reviews published in that journal in 2019. If you select the 3-year option for the same article published in 2019 and the metric category shows 90%, that means that the article or review is performing better than 90% of the other articles/reviews published in that journal in 2019, 2018 and 2017.
Citation Benchmarking is provided by Scopus and SciVal and is different from the metrics context provided by PlumX Metrics.
Metrics Details
- Usage1,338
- Abstract Views1,043
- 1,030
- Downloads295
- 248
- Captures4
- Readers4
- SSRN2
Article Description
We offer a parsimonious index at the individual analyst level to measure the extent to which an analyst relies on earnings and long-term growth forecasts in producing her advice. Using this index, we evaluate the contribution of earnings and growth forecasts to the investment value of analysts’ stock recommendations. We find that the fraction of analysts’ advice attributed to forecasts varies considerably across analysts and sectors. The investment value of recommendations is higher for analysts who rely less on their forecasts and more on other sources of information when forming investment advice. Investors recognize the superiority of recommendations from analysts who rely to a larger degree on information not included in forecasts, as stock prices respond more strongly to changes in their recommendations. Access to management does not explain the superior performance of these analysts.
Bibliographic Details
https://www.ssrn.com/abstract=3864432; http://dx.doi.org/10.2139/ssrn.3864432; https://ink.library.smu.edu.sg/lkcsb_research/7126; https://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=8125&context=lkcsb_research; https://dx.doi.org/10.2139/ssrn.3864432; https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3864432; https://ssrn.com/abstract=3864432
Elsevier BV
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