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- Title
Sell-Side Analysts' Benchmarks.
- Authors
Kadan, Ohad; Madureira, Leonardo; Wang, Rong; Zach, Tzachi
- Abstract
Sell-side analysts employ different benchmarks when defining their recommendations. A buy for some brokers means the stock is expected to outperform its industry, while for other brokers, it means the stock is expected to outperform the market or some return threshold. We show that these stated benchmarks have implications for the distribution of recommendations, price reactions to recommendations, and the investment value of recommendations. We conclude that, depending on the question, academics may need to account for the benchmarks when studying analysts' outputs, and investors may find the benchmarks beneficial in interpreting analysts' advice. JEL Classifications: G10; G24.
- Subjects
SECURITIES analysts; STOCK prices; RISK; JOB performance; BENCHMARKING (Management)
- Publication
Accounting Review, 2020, Vol 95, Issue 1, p211
- ISSN
0001-4826
- Publication type
Article
- DOI
10.2308/accr-52446