Journal of Finance Vol. 58 No. 5 2003
An Empirical Analysis of Analysts' Target Prices: Short‐term Informativeness and Long‐term Dynamics
Abstract
Using a large database of analysts' target prices issued over the period 1997–1999, we examine short‐term market reactions to target price revisions and long‐term comovement of target and stock prices. We find a significant market reaction to the information contained in analysts' target prices, both unconditionally and conditional on contemporaneously issued stock recommendation and earnings forecast revisions. Using a cointegration approach, we analyze the long‐term behavior of market and target prices. We find that, on average, the one‐year‐ahead target price is 28 percent higher than the current market price.
- DOI
- 10.1111/1540-6261.00593
- Volume
- 58
- Issue
- 5
- Pages
- 1933-1967
- Language
- en
- Sources
- crossref openalex bibtex:phds-export.bib