Analyst Activity and Firm Value: Evidence from the REIT Sector

Posted: 26 Aug 2007

See all articles by Erik Devos

Erik Devos

University of Texas at El Paso - College of Business Administration - Department of Economics and Finance

Seow Eng Ong

National University of Singapore (NUS) - Department of Real Estate

Andrew C. Spieler

Hofstra University - Department of Finance

Abstract

This paper is the first to examine (1) properties of analyst forecasts and (2) effects of analyst following on firm value for all REITs on CRSP, Compustat and I/B/E/S. Our results suggest that REITs operate in an information environment that has changed over time. We find that for periods when the REIT industry (post-2000), more analysts cover REITs and forecasts are more accurate and less biased. Further, we find that mortgage REITs are more transparent than other REIT structures and exhibit properties of analyst behavior that are different from other types of REITs. Our investigation into the effect of analyst coverage on REIT value suggests that analyst coverage increases REIT value (as measured by Tobin's q) and that the causality does not run the opposite way.

Keywords: REIT, analyst forecasts

Suggested Citation

Devos, Erik and Ong, Seow Eng and Spieler, Andrew, Analyst Activity and Firm Value: Evidence from the REIT Sector. Journal of Real Estate Finance and Economics, Vol. 35, No. 3, 2007. Available at SSRN: https://ssrn.com/abstract=1009655

Erik Devos (Contact Author)

University of Texas at El Paso - College of Business Administration - Department of Economics and Finance ( email )

500 W. University Ave.
El Paso, TX 79968
United States
915 747 7770 (Phone)

HOME PAGE: http://utminers/utep.edu/hdevos

Seow Eng Ong

National University of Singapore (NUS) - Department of Real Estate ( email )

4 Architecture Drive
Singapore 117566
Singapore
01-65-6516-3552 (Phone)
01-65-6774-8684 (Fax)

Andrew Spieler

Hofstra University - Department of Finance ( email )

Hempstead, NY 11550
United States

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