How do analyst recommendations respond to major news?

被引:68
作者
Conrad, J [1 ]
Cornell, B
Landsman, WR
Rountree, BR
机构
[1] Univ N Carolina, Dept Finance, Chapel Hill, NC 27514 USA
[2] CALTECH, Div Humanities & Social Sci, Pasadena, CA 91125 USA
[3] Univ N Carolina, Dept Accounting, Chapel Hill, NC 27514 USA
[4] Rice Univ, Dept Accounting, Houston, TX 77005 USA
关键词
D O I
10.1017/S0022109000002416
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
We examine how analysts respond to public information when setting stock recommendations. We model the determinants of analysts' recommendation changes following large stock price movements. We find evidence of an asymmetry following large positive and negative returns. Following large stock price increases, analysts are equally likely to upgrade or downgrade. Following large stock price declines, analysts are more likely to downgrade. This asymmetry exists after accounting for investment banking relationships and herding behavior. This result suggests recommendation changes are "sticky" in one direction, with analysts reluctant to downgrade. Moreover, this result implies that analysts' optimistic bias may vary through time.
引用
收藏
页码:25 / 49
页数:25
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