Publication Type
Journal Article
Version
acceptedVersion
Publication Date
2-2011
Abstract
The existing literature measures the contribution of analyst recommendation changes using average stock-price reactions. With such an approach, recommendation changes can have a significant impact even if no recommendation has a visible stock-price impact. Instead, we call a recommendation change influential only if it affects the stock price of the affected firm visibly. We show that only 12% of recommendation changes are influential. Recommendation changes are more likely to be influential if they are from leader, star, previously influential analysts, issued away from consensus, accompanied by earnings forecasts, and issued on growth, small, high institutional ownership, or high forecast dispersion firms.
Keywords
Security Analysts, Stock Recommendations
Discipline
Corporate Finance | Portfolio and Security Analysis
Research Areas
Finance
Publication
Review of Financial Studies
Volume
24
Issue
2
First Page
593
Last Page
627
ISSN
0893-9454
Identifier
10.1093/rfs/hhq094
Publisher
Oxford University Press
Citation
LOH, Roger and STULZ, Rene M..
When are analyst recommendation changes influential?. (2011). Review of Financial Studies. 24, (2), 593-627.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/3127
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Appendix
Additional URL
https://doi.org/10.1093/rfs/hhq094