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    Rights statement: This is an Accepted Manuscript of an article published by Taylor & Francis in Accounting and Business Research on 06/09/2018, available online: http://www.tandfonline.com/10.1080/00014788.2018.1510303

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Strategic distortions in analyst forecasts in the presence of short-term institutional investors

Research output: Contribution to journalJournal article

Published

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Strategic distortions in analyst forecasts in the presence of short-term institutional investors. / Bilinski, Pawel Tomasz; Cumming, Douglas; Hass, Lars Helge; Stathopoulos, Konstantinos ; Walker, Martin.

In: Accounting and Business Research, Vol. 49, No. 3, 28.02.2019, p. 305-341.

Research output: Contribution to journalJournal article

Harvard

Bilinski, PT, Cumming, D, Hass, LH, Stathopoulos, K & Walker, M 2019, 'Strategic distortions in analyst forecasts in the presence of short-term institutional investors', Accounting and Business Research, vol. 49, no. 3, pp. 305-341. https://doi.org/10.1080/00014788.2018.1510303

APA

Vancouver

Author

Bilinski, Pawel Tomasz ; Cumming, Douglas ; Hass, Lars Helge ; Stathopoulos, Konstantinos ; Walker, Martin. / Strategic distortions in analyst forecasts in the presence of short-term institutional investors. In: Accounting and Business Research. 2019 ; Vol. 49, No. 3. pp. 305-341.

Bibtex

@article{b1280873dc23499086d8023cc4786713,
title = "Strategic distortions in analyst forecasts in the presence of short-term institutional investors",
abstract = "We document that analysts cater to short-term investors by issuing optimistic target prices. Catering dominates among analysts at brokers without an investment banking arm as they face lower reputational cost. The market does not see through the analyst catering activity and their forecasts lead to temporary stock overpricing that short-term institutional investors exploit to offload their holdings to retail traders. We also report evidence consistent with catering brokers being rewarded with more future trades channelled through them. Our study identifies a new source of conflicts of interest in analyst research originating from the ownership composition of a stock.",
keywords = "target prices, earnings forecasts, strategic distortions, short-term investors",
author = "Bilinski, {Pawel Tomasz} and Douglas Cumming and Hass, {Lars Helge} and Konstantinos Stathopoulos and Martin Walker",
note = "This is an Accepted Manuscript of an article published by Taylor & Francis in Accounting and Business Research on 06/09/2018, available online: http://www.tandfonline.com/10.1080/00014788.2018.1510303",
year = "2019",
month = feb
day = "28",
doi = "10.1080/00014788.2018.1510303",
language = "English",
volume = "49",
pages = "305--341",
journal = "Accounting and Business Research",
issn = "0001-4788",
publisher = "Routledge",
number = "3",

}

RIS

TY - JOUR

T1 - Strategic distortions in analyst forecasts in the presence of short-term institutional investors

AU - Bilinski, Pawel Tomasz

AU - Cumming, Douglas

AU - Hass, Lars Helge

AU - Stathopoulos, Konstantinos

AU - Walker, Martin

N1 - This is an Accepted Manuscript of an article published by Taylor & Francis in Accounting and Business Research on 06/09/2018, available online: http://www.tandfonline.com/10.1080/00014788.2018.1510303

PY - 2019/2/28

Y1 - 2019/2/28

N2 - We document that analysts cater to short-term investors by issuing optimistic target prices. Catering dominates among analysts at brokers without an investment banking arm as they face lower reputational cost. The market does not see through the analyst catering activity and their forecasts lead to temporary stock overpricing that short-term institutional investors exploit to offload their holdings to retail traders. We also report evidence consistent with catering brokers being rewarded with more future trades channelled through them. Our study identifies a new source of conflicts of interest in analyst research originating from the ownership composition of a stock.

AB - We document that analysts cater to short-term investors by issuing optimistic target prices. Catering dominates among analysts at brokers without an investment banking arm as they face lower reputational cost. The market does not see through the analyst catering activity and their forecasts lead to temporary stock overpricing that short-term institutional investors exploit to offload their holdings to retail traders. We also report evidence consistent with catering brokers being rewarded with more future trades channelled through them. Our study identifies a new source of conflicts of interest in analyst research originating from the ownership composition of a stock.

KW - target prices

KW - earnings forecasts

KW - strategic distortions

KW - short-term investors

U2 - 10.1080/00014788.2018.1510303

DO - 10.1080/00014788.2018.1510303

M3 - Journal article

VL - 49

SP - 305

EP - 341

JO - Accounting and Business Research

JF - Accounting and Business Research

SN - 0001-4788

IS - 3

ER -