Financial Analysts’ Forecasts and Stock Recommendations: A Review of the Research

111 Pages Posted: 14 Jun 2010

See all articles by Sundaresh Ramnath

Sundaresh Ramnath

University of Miami - Department of Accounting

Steve Rock

University of Colorado at Boulder - Department of Accounting

Philip B. Shane

College of William & Mary; Monash University; Monash University - Department of Accounting

Date Written: June 14, 2010

Abstract

This surveys reviews research regarding the role of financial analysts in capital markets. The survey builds on the perspectives provided by Schipper (1991) and Brown (1993). We categorize papers published mainly since 1992 and selectively discuss aspects of these papers that address or suggest key research topics of ongoing interest in seven broad areas: analysts’ decision processes, the determinants of analyst expertise and distributions of individual analysts’ forecasts, the informativeness of analysts’ research outputs, analyst and market efficiency with respect to information, effects of analysts’ economic incentives on their research outputs, effects of the institutional and regulatory environment (including cross-country comparisons), and the limitations of databases and various research paradigms.

Suggested Citation

Ramnath, Sundaresh and Rock, Steven Karl and Shane, Philip B., Financial Analysts’ Forecasts and Stock Recommendations: A Review of the Research (June 14, 2010). Foundations and Trends in Finance, Vol. 2, No. 4, pp. 311-421, 2006. Available at SSRN: https://ssrn.com/abstract=1624980

Sundaresh Ramnath (Contact Author)

University of Miami - Department of Accounting ( email )

Coral Gables, FL 33146-6531
United States
305-284-6668 (Phone)

Steven Karl Rock

University of Colorado at Boulder - Department of Accounting ( email )

419 UCB
Boulder, CO 80309-0419
United States
303-735-5009 (Phone)
303-492-5962 (Fax)

Philip B. Shane

College of William & Mary ( email )

P.O. Box 8795
Williamsburg, VA 23185
United States

Monash University ( email )

23 Innovation Walk
Wellington Road
Clayton, Victoria 3800
Australia

Monash University - Department of Accounting ( email )

H3.43, Building H, Level 3
Monash University Caulfiled
Melbourne, VIC 3145
Australia

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