Analysts and insiders increase price informativeness by revealing new information to financial markets, and prior work has shown that these parties hold both firm-specific and aggregate information. This study examines how the level of informational efficiency with respect to a stock price's firm and industry-level information environment can differently mediate the information content of analyst recommendations and insider trades. I find that (1) the decrease in information revealed by insider trades is larger than that from analyst recommendations when a stock's price is more efficient with respect to firm-specific information, while (2) the increase in information revealed by analyst recommendations is larger than that from insider trades when a stock's price is less efficient with respect to industry-level information. Taken together, my results indicate that analysts (insiders) may have relative informational expertise with regards to industry (firm) information, and that both appear to rely on their specific expertise when informing prices.

Analyzing a panel of earnings announcers from 1998–2022, we document that the aggregate market return on quarterly earnings announcement dates is positively associated with the announcing firm’s subsequent three-day abnormal returns. This phenomenon is strongest for firms with extreme earnings surprises and dissipates by day seven, indicating a short-lived delay in incorporating the aggregate news. We also document a sluggish return response to same-day macro news disclosures, especially when earnings surprises are extreme. Effects strengthen when investors exert more effort in acquiring announcing firm information, measured by SEC EDGAR filing downloads, when macronews has a larger impact on a firm’s stock returns, when firms are smaller, and when investors’ attention and processing capacity are more constrained, proxied by retail trading. Overall, the findings support the notion that investors have finite information processing capacity and that intensive efforts to acquire firm earnings news delay the incorporation of macroeconomic news into prices.

We find that the adverse impact of bad news on analysts’ valuations is 57% larger when the CEO is Non-White, resulting in more pessimistic valuations for Non-White CEOs relative to their White counterparts. Non-White CEO firms are more likely to surpass analysts’ valuation targets in the subsequent 12 months, suggesting that this racial gap lacks economic justification. To provide further evidence of a racial bias: (1) we triangulate our empirical findings with corroborating evidence from a controlled experiment and (2) we provide evidence that analysts’ valuation disparities towards Non-White CEO firms become larger when race relations are worse. Increases in CEO familiarity attenuate these disparities, suggesting the bias we document appears to be subconscious. Our findings suggest that resources allocated towards educating a firm’s stakeholders about the potential impact of implicit racial biases and increasing self-awareness may be impactful in promoting equality within capital markets.

We study the role of CFO narcissism in the intent and ability to positively influence sell-side analysts’ perceptions of the firm. Consistent with narcissists casting favorable impressions on others, we find CFO narcissism is associated with overly optimistic analyst valuations. We then study public persuasion attempts by analyzing conference call transcripts and private persuasion attempts through a laboratory study. In the conference call setting, we show that narcissistic CFOs use more persuasive language and are more inclined to call on bearish analysts, both of which we link to price target revisions following the call. In the lab study, we simulate a one-on-one conversation and find that narcissists are especially more likely to use coercive methods to induce higher valuations from analysts. Collectively, we show that narcissistic CFOs use persuasion to favorably influence analysts’ perceptions of firm value.