We study the predictive ability of individual analyst target price changes for post-event abnormal stock returns within each recommendation category. Although prior studies generally demonstrate the investment value of target prices, we find that target price changes do not cause abnormal...

We introduce a new way to measure the forecast effort that analysts devote to their earnings forecasts by measuring the analyst's general effort for all covered firms. While the commonly applied effort measure is based on analyst behavior for one firm, our measure considers analyst behavior for...

We introduce a novel framework to predict the relative accuracy of sell-side analysts' annual earnings forecasts out-of-sample. Prior studies only evaluate forecasts shortly before the corresponding earnings release. In contrast, our study is the first to provide long-term predictions which are...

Analysts who provide more accurate earnings forecasts also issue more profitable recommendations. We demonstrate how investors can profit from this contemporaneous link by differentiating between “able” and “lucky” analysts. In line with previous studies, we find that past track records...

We examine the role of macroeconomic announcements in shaping the earnings forecasts of equity market analysts. We find that earnings forecasts strongly respond to macroeconomic releases signaling changes in overall business conditions after controlling for analysts' learning from firm- and...