Rights statement: This is the peer reviewed version of the following article:Peasnell, K. , Yin, Y. , Lubberink, M. and Wyatt, A. (2018), Analysts’ stock recommendations, earnings growth and risk. Account Finance, 58: 217-254. doi:10.1111/acfi.12202 which has been published in final form at http://onlinelibrary.wiley.com/doi/10.1111/acfi.12202/abstract This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.
Accepted author manuscript, 347 KB, PDF document
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Final published version
Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
}
TY - JOUR
T1 - Analysts' stock recommendations, earnings growth and risk
AU - Peasnell, Kenneth Vincent
AU - Yin, Yuan
AU - Lubberink, Martien
N1 - This is the peer reviewed version of the following article:Peasnell, K. , Yin, Y. , Lubberink, M. and Wyatt, A. (2018), Analysts’ stock recommendations, earnings growth and risk. Account Finance, 58: 217-254. doi:10.1111/acfi.12202 which has been published in final form at http://onlinelibrary.wiley.com/doi/10.1111/acfi.12202/abstract This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.
PY - 2018/3
Y1 - 2018/3
N2 - A key output of sell-side analysts is their recommendations to investors as to whether they should, buy, hold or sell a company's shares. However, relatively little is known regarding the determinants of those recommendations. This study considers this question, presenting results that suggest that recommendations are dependent on analysts’ short-term and long-term earnings growth forecasts, as well as on proxies for the analysts’ unobservable views on earnings growth in the more distant future and risk. Furthermore, analysts who appear to incorporate earnings growth beyond the long-term growth forecast horizons and risk into their recommendation decisions make more profitable stock recommendations.
AB - A key output of sell-side analysts is their recommendations to investors as to whether they should, buy, hold or sell a company's shares. However, relatively little is known regarding the determinants of those recommendations. This study considers this question, presenting results that suggest that recommendations are dependent on analysts’ short-term and long-term earnings growth forecasts, as well as on proxies for the analysts’ unobservable views on earnings growth in the more distant future and risk. Furthermore, analysts who appear to incorporate earnings growth beyond the long-term growth forecast horizons and risk into their recommendation decisions make more profitable stock recommendations.
KW - Long-term growth forecast
KW - Nonlinearity
KW - Really long-term growth
KW - Stock price volatility
KW - Stock recommendations
U2 - 10.1111/acfi.12202
DO - 10.1111/acfi.12202
M3 - Journal article
VL - 58
SP - 217
EP - 254
JO - Accounting and Finance
JF - Accounting and Finance
SN - 0810-5391
IS - 1
ER -