To maximize firm value managers must efficiently invest new capital. This paper examines whether analyst coverage impacts a firm's investment efficiency. Using broker mergers and closures as exogenous shocks to the number of analysts covering a firm we find that firm investment efficiency...

We investigate the determinants of analysts' target price forecasts and evaluate their relative importance for explaining the cross-sectional variation in target price implied returns. We identify four broad determinants: the informational component predictive of future stock returns, errors in...

We investigate the determinants of analysts' target price implied returns and the implication of our findings for investment decision-making. We identify four broad sets of factors that help explain the cross-sectional variation in target price implied returns: future realized stock returns,...

We investigate three potential channels of analyst value creation: improving fundamental performance through monitoring, reducing information asymmetry, and increasing investor recognition. We show that changes in investor recognition have consistent explanatory power for the market reaction to...