Publication Type
Journal Article
Version
acceptedVersion
Publication Date
1-2020
Abstract
Sell-side analysts employ different benchmarks when defining their recommendations. A buy for some brokers means the stock is expected to outperform its industry, while for other brokers it means the stock is expected to outperform the market, or some return threshold. We show that these stated benchmarks have implications for the distribution of recommendations, price reactions to recommendations, and the investment value of recommendations. We conclude that, depending on the question, academics may need to account for the benchmarks when studying analysts’ outputs, and investors may find the benchmarks beneficial in interpreting analysts’ advice.
Keywords
Analysts, Benchmarks, Recommendations
Discipline
Finance and Financial Management | Portfolio and Security Analysis
Research Areas
Finance
Publication
Accounting Review
Volume
95
Issue
1
First Page
211
Last Page
232
ISSN
0001-4826
Identifier
10.2308/accr-52446
Publisher
American Accounting Association
Citation
KADAN, Ohad; MADUREIRA, Leonardo; WANG, Rong; and ZACH, Tzachi.
Sell-side analysts' benchmarks. (2020). Accounting Review. 95, (1), 211-232.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/6523
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.
Additional URL
https://doi.org/10.2308/accr-52446