Are Rankings of Financial Analysts Useful to Investors?

32 Pages Posted: 26 Oct 2015

See all articles by Artur Aiguzhinov

Artur Aiguzhinov

Universidade do Porto - Faculdade de Economia (FEP)

Ana Paula Serra

Universidade do Porto - Faculdade de Economia (FEP)

Carlos Soares

Universidade do Porto - Faculty of Engineering

Date Written: October 26, 2015

Abstract

Several institutions issue rankings based on the accuracy of price and EPS forecasts. Given that these rankings are ex-post they may not be able useful to investors. In this paper we show that trading strategies based on perfect foresight and past rankings outperform a passive strategy. In addition, we report that investors are better off following analysts that issue accurate price targets rather that those with accurate EPS forecasts.

Keywords: Financial Analysts, Rankings, Target price

JEL Classification: G11

Suggested Citation

Aiguzhinov, Artur and Serra, Ana Paula Sousa Freitas Madureira and Soares, Carlos, Are Rankings of Financial Analysts Useful to Investors? (October 26, 2015). Available at SSRN: https://ssrn.com/abstract=2680094 or http://dx.doi.org/10.2139/ssrn.2680094

Artur Aiguzhinov (Contact Author)

Universidade do Porto - Faculdade de Economia (FEP) ( email )

Rua Roberto Frias
s/n
Porto, 4200-464
Portugal

Ana Paula Sousa Freitas Madureira Serra

Universidade do Porto - Faculdade de Economia (FEP) ( email )

Rua Roberto Frias
s/n
Porto, 4200-464
Portugal

Carlos Soares

Universidade do Porto - Faculty of Engineering ( email )

Rua Dr. Roberto Frias
4200-464 Porto
Portugal

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