Impact of Analyst Recommendations on Stock Prices

The paper studies the impact of buy and sell recommendations issued by analysts on the stock prices of companies listed on the National Stock Exchange (NSE) of India. Event study methodology is used to compute the abnormal returns around the event window, which is taken as -10 to 10. The study finds that buy recommendations issued by analysts on public domains help the investors generate abnormal returns on the day of the recommendation. On the other hand, sell recommendations do not show significant negative abnormal returns