An Empirical Analysis of Analysts' Target Prices: Short-term Informativeness and Long-term Dynamics
Journal Article (Review;Journal)
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.
Full Text
Duke Authors
Cited Authors
- Brav, A; Lehavy, R
Published Date
- January 1, 2003
Published In
Volume / Issue
- 58 / 5
Start / End Page
- 1933 - 1968
International Standard Serial Number (ISSN)
- 0022-1082
Digital Object Identifier (DOI)
- 10.1111/1540-6261.00593
Citation Source
- Scopus