The study empirically examines the investment value of analyst recommendations on constituent stocks of the S&P/ASX 50 index. For the period from 30 June 1997 to 30October 2007, we find that stocks with favourable consensus recommendations(“strong buy” and “buy”) on average earn a higher...

Analysts often update their recommendations following corporate news. Questions have been raised regarding analysts' ability to generate new information beyond recent corporate events. Employing a comprehensive database on corporate news we show that only a small minority of 27.9% of all...