Purpose: This study investigates the behavior of sell-side analysts covering firms that are about to experience breaks in strings of consecutive quarterly earnings increases.Design/methodology/approach: We estimate the likelihood of analysts predicting a break using logit regressions for 1.8M...

This paper examines whether sell-side security analysts follow momentum or create momentum by themselves for recommending stocks. We employ an indirect method of testing the role of analysts by assigning projected recommendation scores for the neglected stocks to mitigate the so-called...

Using a model without conflicts of interest and with identical information available to equity analysts, we show that bias and herding in their stock recommendations occur due to incentives provided by relative performance evaluation and top awards. Furthermore, these incentives also lead to...

Regulators and the investment community have been concerned that institutional investors pressure financial analysts through trading commission fees to issue optimistic opinions in support of their stock positions. We use a unique dataset that identifies mutual fund companies' allocation of...

We estimate the dynamics of recommendations by financial analysts, uncovering the determinants of inertia in their recommendations. We provide overwhelming evidence that analysts revise recommendations reluctantly, introducing frictions to avoid frequent revisions. More generally, we...

We estimate the dynamics of recommendations by financial analysts, uncovering the determinants of inertia in their recommendations. We provide overwhelming evidence that analysts revise recommendations reluctantly, introducing frictions to avoid frequent revisions. More generally, we...

This study investigates the association between institutional investors’ ownership and sell-side analysts’ stock recommendations in the context of the heterogeneous nature of institutional investors. Based on a sample of 281 Malaysian public listed companies over the period 2008-2013 (732...

We examine a specific form of what we term analyst contrarianism. We define contrarianism as cases where an analyst expresses a summary opinion contrary to the direction of a given earnings surprise or revision. Distinct from analyst optimism or boldness, we document that analysts interpret...

Despite the importance of sell-side analysts in the capital markets, we know little about the effectiveness of routine monitoring of the sell-side industry. We examine the attributes of sell-side research issued by analysts before and after their brokerage faces regulatory sanctions. We find...

Despite the importance of sell-side analysts in the capital markets, we know little about the effectiveness of routine monitoring of the sell-side industry. We examine the attributes of sell-side research issued by analysts before and after their brokerage is subject to regulatory sanctions. We...