Are Financial Analysts Accurate and Relevant? A Review of Relevant Research
21 Pages Posted: 19 Sep 2011 Last revised: 27 Aug 2012
Date Written: September 18, 2011
Financial analysts have a strong influence in the market place; their recommendations can influence company’s prices, strategic outlook, and market value. This paper will review relevant research papers, and critically examine previous research to find all aspects, positive, negative, and contradictory findings which impact analyst’s accuracy and relevancy. My findings show that the evidence of analysts’ accuracy as a group, to be ambiguous, mixed and contradictory, although there is strong evidence some individual analysts are consistently accurate. As to the question of relevancy, the answer is a strong affirmative, as the review has shown analysts provide value other that predicting earnings and recommendations.
Keywords: financial analysts, accuracy, relevant
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