Publication Type
Journal Article
Version
Postprint
Publication Date
6-2018
Abstract
Because uncertainty is high in bad times, investors find it harder to assess firm prospects and, hence, should value analyst output more. However, higher uncertainty makes analysts’ tasks harder so it is unclear if analyst output is more valuable in bad times. We find that, in bad times, analyst revisions have a larger stock-price impact, earnings forecast errors per unit of uncertainty fall, reports are more frequent and longer, and the impact of analyst output increases more for harder-to-value firms. These results are consistent with analysts working harder and investors relying more on analysts in bad times.
Keywords
Security Analysts, Stock Recommendations, Earnings Forecasts, Crisis, Recessions, Uncertainty
Discipline
Finance and Financial Management | Portfolio and Security Analysis
Research Areas
Finance
Publication
Journal of Finance
Volume
73
Issue
3
First Page
959
Last Page
1013
ISSN
1540-6261
Identifier
10.1111/jofi.12611
Publisher
Wiley
Embargo Period
5-3-2017
Citation
LOH, Roger and STULZ, René.
Is sell-side research more valuable in bad times?. (2018). Journal of Finance. 73, (3), 959-1013. Research Collection Lee Kong Chian School Of Business.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/5143
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.
Additional URL
https://doi.org/10.1111/jofi.12611