31 Pages Posted: 12 Jul 2011
Date Written: July 11, 2011
This study examines the immediate and delayed market responses to revisions in analyst forecasts of earnings, target prices, and recommendations. Consistent with prior literature, revisions in earnings forecasts are positively and significantly associated with short-term market returns around the revisions. However, we show that short-term market returns around target price revisions and recommendation changes are even stronger. We also find superior future performance (return drift) for portfolios that use information from all three types of revisions to those using information from only one of the three types of revisions.
Suggested Citation: Suggested Citation
Feldman, Ronen and Livnat, Joshua and Zhang, Yuan, Analysts’ Earnings Forecast, Recommendation and Target Price Revisions (July 11, 2011). Available at SSRN: https://ssrn.com/abstract=1883819 or http://dx.doi.org/10.2139/ssrn.1883819
By Meb Faber