Moving Targets

39 Pages Posted: 21 Mar 2024

See all articles by Lauren Cohen

Lauren Cohen

Harvard University - Business School (HBS); National Bureau of Economic Research (NBER)

Quoc Nguyen

DePaul University

Date Written: February 1, 2024


We find that managers strategically shift targets in their communications with investors and markets. Using the complete history of the earnings conference call transcripts by U.S. corporations from 2006 – 2020, we employ natural language processing techniques to analyze conference calls and find that managers choose and re-choose targets to ensure they clear their endogenously chosen hurdle. For instance, if they have seen same-store sales growth for 16 consecutive quarters, they will mention this intensively. However, when they encounter a quarter without same-store sales growth, they shift the conversation to another metric, such as cost savings or strategic R&D. When managers change the target, this predicts significant negative returns and realizations for the firm in question. In particular, in the quarter following a moved target, firms underperform by up to 99 basis points per month (t-stat = 4.38) in value-weighted monthly abnormal return (alpha). Moreover, we find that the effects are significantly stronger with more complex targets, non-financial targets, and the most persistent targets.

Keywords: Information, performance targets, predictable returns, earnings conference call, inattention

JEL Classification: G12, G14, G02

Suggested Citation

Cohen, Lauren and Nguyen, Quoc, Moving Targets (February 1, 2024). Available at SSRN: or

Lauren Cohen (Contact Author)

Harvard University - Business School (HBS) ( email )

Rock Center 321
Soldiers Field
Boston, MA 02163
United States


National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Quoc Nguyen

DePaul University ( email )

1 East Jackson Blvd.
Chicago, IL 60604
United States

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