This study examines how analysts respond to public information when setting their stock recommendations. Specifically, for a sample of stocks that experience large stock price movements, we model the determinants of analysts' recommendation changes. Using an ordered probit model based on all...

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...

We provide evidence that the asymmetrical price reaction to bad news at earnings announcements is most pronounced when overall market price-earnings ratios are high. This finding is consistent with both unwarranted investor optimism and investor uncertainty. However, evidence also indicates that...

We examine whether the price response to bad and good earnings shocks changes as the relative level of the market changes. The study is based on a complete sample of annual earnings announcements during the period 1988 to 1998. The relative level of the market is based on the difference between...

We examine whether the price response to bad and good earnings shocks changes as the relative level of the market changes. The study is based on a complete sample of annual earnings announcements during the period 1988 to 1998. The relative level of the market is based on the difference between...

Using a comprehensive sample of switches to and from the largest auditors (i.e., the Big N), we examine empirically whether the sensitivity of Big N auditor switches to client risk and misalignment changed between the pre- and post-Enron periods. Although we find an increase in the sensitivity...

This study examines how analysts respond to public information when setting their stock recommendations. Specifically, for a sample of stocks that experience large stock price movements, we model the determinants of analysts’ recommendation changes. Using an ordered probit model based on...

We present a comprehensive analysis of the association between stock returns, quarterly earnings forecast errors, and quarter-ahead and year-ahead earnings forecast revisions. We find that forecast errors and the two forecast revisions have significant effects on stock prices, indicating each...

The longstanding debate over the proper definition of "earnings"-whether investors when setting stock prices focus primarily on GAAP earnings or other measures like operating cash flow-is both misguided and theoretically unresolvable. The biggest problem faced by investors in evaluating earnings...