International Evidence on Analyst Stock Recommendations, Valuations, and Returns

• 成果类型: Article
• 署名作者: Barniv, Ran; Hope, Ole-Kristian; Myring, Mark; Thomas, Wayne B.
• 署名单位: University System of Ohio; Kent State University; Kent State University Kent; Kent State University Salem; University of Toronto; Ball State University; University of Oklahoma System; University of Oklahoma - Norman
• 刊物名称: CONTEMPORARY ACCOUNTING RESEARCH
• ISSN/ISSBN: 0823-9150
• DOI: 10.1111/j.1911-3846.2010.01036.x
• 发表日期: 2010
• 页码: 1131-+
• 关键词: legal liability regimes; Investor protection; accounting standards; earnings management; information-content; VALUE RELEVANCE; big-4 premiums; forecasts; cost; environments

摘要

This is the first large study to examine the relation between analysts' stock recommendations, earnings forecasts, and future excess stock returns in an international context. We first document that some of the peculiar findings established in the United States extend to other countries where individual investor participation in the stock market is high (especially when Japan is excluded from the sample). Specifically, we find that analysts' recommendations relate positively to simple heuristics but negatively to more rigorous residual income valuation estimates (scaled by price). Furthermore, residual income valuation estimates relate positively to future returns, indicating their usefulness to investors, while analysts' recommendations and heuristics relate negatively to future stock returns. In contrast, in countries with low investor participation rates, these peculiar findings are less observable. In these countries, analysts appear to rely relatively more on residual income valuation estimates in setting their recommendations, and these recommendations relate positively to future returns. The overall results are consistent with analysts' recommendations being influenced by economic incentives other than identifying mispriced stocks in countries with high investor participation rates, substantiating puzzling results in the United States.