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

Copyright Owner and License

Authors

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 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

Share

COinS