Analysts' choice of peer companies

• 成果类型: Article
• 署名作者: De Franco, Gus; Hope, Ole-Kristian; Larocque, Stephannie
• 署名单位: University of Toronto; University of Notre Dame
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-014-9294-7
• 发表日期: 2015
• 页码: 82-109
• 关键词: CONFLICT-OF-INTEREST; EARNINGS FORECASTS; empirical-analysis; performance; selection; recommendations; accuracy; coverage; FIRMS

摘要

This is the first large-scale study to examine the peer companies used by sell-side equity analysts in their research reports. Using a unique hand-collected data set, we investigate the relation between peer valuation and peer choice by analysts. We find that analysts on average select peer companies with high valuations and that this effect varies systematically with analysts' incentives and ability. Our evidence provides partial support for the idea that analysts choose peers strategically. We also find some support for the idea that the selection of peers with high valuations is used in part to justify optimistically skewed target prices and stock recommendations.