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A Review of Research Related to Financial Analysts' Forecasts and Stock Recommendations

117 Pages Posted: 16 Nov 2005 Last revised: 27 Apr 2010

Sundaresh Ramnath

University of Miami - Department of Accounting

Steve Rock

University of Colorado at Boulder - Department of Accounting

Philip B. Shane

College of William & Mary

Date Written: June 30, 2008

Abstract

This paper reviews research regarding the role of financial analysts in capital markets. The paper builds on the perspectives provided by Schipper (1991) and Brown (1993). We categorize papers published mainly since 1992 and selectively discuss aspects of these papers that address or suggest key research topics of ongoing interest in seven broad areas: analysts' decision processes, the determinants of analyst expertise and distributions of individual analysts' forecasts, the informativeness of analysts' research outputs, analyst and market efficiency with respect to information, effects of analysts' economic incentives on their research outputs, effects of the institutional and regulatory environment (including cross-country comparisons), and the limitations of databases and various research paradigms.

Keywords: Financial analyst forecasts, analyst recommendations

JEL Classification: G29, G14, G15, M41, M47

Suggested Citation

Ramnath, Sundaresh and Rock, Steve and Shane, Philip B., A Review of Research Related to Financial Analysts' Forecasts and Stock Recommendations (June 30, 2008). Available at SSRN: https://ssrn.com/abstract=848248 or http://dx.doi.org/10.2139/ssrn.848248

Sundaresh Ramnath

University of Miami - Department of Accounting ( email )

Coral Gables, FL 33146-6531
United States
305-284-6668 (Phone)

Steven Karl Rock

University of Colorado at Boulder - Department of Accounting ( email )

419 UCB
Boulder, CO 80309-0419
United States
303-735-5009 (Phone)
303-492-5962 (Fax)

Philip B. Shane (Contact Author)

College of William & Mary ( email )

P.O. Box 8795
Williamsburg, VA 23185
United States

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