The Informational Role of Analysts' Qualitative Research Outputs

37 Pages Posted: 19 Nov 2019

See all articles by Kotaro Miwa

Kotaro Miwa

Tokio Marine Asset Management

Date Written: November 6, 2019


Several studies have indicated that textual tones in analysts’ reports, a representative qualitative output of analysts’ reports, possess informational value. In this study, I clarify incremental information in the report tone. I predict a report tone as holding fundamental information that analysts have a weak incentive to incorporate into their forecasts regarding company performance. Consistent with my prediction, I find that the report tones contain incremental earnings and sales information beyond their earnings and sales forecasts. Specifically, report tones of sell-side analysts, who are reluctant to incorporate negative information into quantitative output, contain incremental negative information; in contrast, report tones of media analysts, who have a weak incentive to incorporate positive information, contain incremental positive information. Finally, the result reveals that prices underreact to sell-side analysts’ negative tone and media analysts’ positive tone, suggesting that the gradual incorporation of the fundamental information into quantitative outputs affects prices by inducing a delay in investor’s reaction to the information.

Keywords: analyst report; textual information; report tone; earnings forecasts; sales forecasts

JEL Classification: G10, G14, G20

Suggested Citation

Miwa, Kotaro, The Informational Role of Analysts' Qualitative Research Outputs (November 6, 2019). Available at SSRN: or

Kotaro Miwa (Contact Author)

Tokio Marine Asset Management ( email )

1-3-1, Marunouchi
81332128186 (Phone)


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