Consensus analyst target prices are widely available online at no cost to investors. In this paper we consider whether these consensus target prices are informative for predicting future returns. We find that when considered in isolation, consensus target prices are not generally informative...

We explore the effects of fundamental extrapolation on stock returns. Empirically, we propose a novel approach to extrapolate firms' fundamental information and find that a strategy based on fundamental extrapolation earns an average return of 0.80% per month. Theoretically, we show that...

We examine article, author and firm characteristics of investment articles published by non-professional analysts on the social media investment platform Seeking Alpha from 2006 to 2020 leading to visible market value changes. We show that there are differences between articles followed by stock...

We document a strong positive initial market reaction to merger announcements from bidders with either large earnings growth or significant earnings decline, relative to those with neutral earnings change, reflecting a U-shaped pattern between bidders’ earnings growth and announcement returns....

We study the role of analyst incentives in the overall information environment in the stock market, focusing on the fundamental changes brought by MiFID II on the sell-side research industry in Europe. Implemented in 2018, MiFID II substantially changed analyst incentives, forcing them to work...

On September 20, 2016, the Japan Securities Dealers Association implemented guidelines that prohibited securities sell-side analysts to obtain an earnings preview before the earnings' official release. We examine the unique impact of the guidelines on market behavior and analyst forecasts in the...

This paper examines the role of sophisticated investors in pricing future earnings. Using the future earnings response coefficient (FERC) model recently developed by Ettredge et al. (2005), we test the effect of analyst following and institutional ownership on the informativeness of stock...

The extant research indicates that analysts' long-term earnings growth forecasts are especially optimistic for past winners, and have little predictive power to distinguish between high-growth and low-growth firms. In explaining the poor informational value of analysts' long-term earnings growth...

I analyze 18510 SEC EDGAR Form 10-K (annual reports), for NASDAQ, NYSE and AMEX (NYSE MKT) stocks, along with 176565 SEC EDGAR Form 13-F (quarterly reports of institutional investors holdings), and analysts' recommendations, from 2001 until 2015. I find that (i) 10-K pessimism negatively affects...

Following the Global Settlement, analysts extensively use a top pick designation to highlight their highest conviction best ideas. Such a designation enables analysts to provide greater granularity of information, but it can potentially be influenced by conflicts of interest. Examining a...