The Use of Target Prices to Justify Sell-Side Analysts' Stock Recommendations

By Mark Bradshaw. 2002

265 citations recorded by the source corpus.

Subfields: Accounting, Finance

View Paper: https://www.semanticscholar.org/paper/24945312465303da823abf8e5654cc5a1229ea14

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

1. Martin Walker
2. Shahed Imam
3. Danielle Lyssimachou
4. Pawel Bilinski
5. C. Clubb
6. Richard William Barker
7. Norman Strong
8. Gil Sadka

In Finance

1. Martin Walker
2. Shahed Imam
3. Danielle Lyssimachou
4. Pawel Bilinski
5. C. Clubb
6. Richard William Barker
7. Gil Sadka
8. Ray Ball

Citations in the corpus

• Target price accuracy:international evidence (2013, methodology): “The implementation of IFRS was anticipated to increase cross-country comparability and transparency of accounting disclosure, and result in higher quality information about firm performance becoming available to analysts and investors.”
• Do Analysts Practice What They Preach and Should Investors Listen? Effects of Recent Regulations (2009, unknown): “ABSTRACT: From 1994 to 1998, Bradshaw (2004) finds that analysts’ stock recommendations relate negatively to residual income valuation estimates but positively to valuation heuristics based on the price-to-earnings-to-growth ratio and long-term growth.”
• Using Psychology Theories in Archival Financial Accounting Research (2005, background): “Thus, while the accounting literature assumes that analysts ‘work forwards’ in providing earnings forecasts and stock recommendations (Bradshaw 2002), anecdotal evidence and motivated reasoning theories suggest that analysts will sometimes ‘work backwards.’”
• Evidence on the Information Content of Text in Analyst Reports (2014, background): “For example, prior research shows that many analysts generate target prices based on price-multiple heuristics, such as price-earning-to-growth (PEG) (Bradshaw 2002; Asquith et al. 2005).”
• Does Valuation Model Choice Affect Target Price Accuracy? (2010, background): “This result contrasts with the findings of Bradshaw (2002) and Asquith et al. (2005), who find limited use of DCF models in practice.24 We find that analysts make valuation model choices consistent with our predictions.”
• Analysts’ Forecasts: What Do We Know after Decades of Work? (2011, unknown): “For example, Bradshaw (2002) performed a content analysis and found that analysts’ valuations are almost always based on various earnings-multiple heuristics, and Bradshaw (2004) documented that researcher-generated recommendations based on simple residual income valuations using analysts’ earnings…”
• The Use of Valuation Models by UK Investment Analysts (2008, background): “Consistent with previous research (Barker, 1999a; Bradshaw, 2002; Demirakos et al., 2004) we classified all absolute valuation models as sophisticated models (i.e. the DDM, DCF, EVA and CFROI) and all relative valuation models as unsophisticated.”
• Uncovering expected returns: Information in analyst coverage proxies (2017, unknown): “However, related studies show analysts’ employment incentives create predictable biases in their outputs and coverage decisions (e.g., Womack, 1996; Bradshaw, 2002; Groysberg et al., 2011 ).”
• Do sell-side analysts exhibit differential target price forecasting ability? (2012, unknown): “Analysts often provide target prices to support their stock recommendations (Bradshaw 2002).”
• The Financial Analyst Forecasting Literature: A Taxonomy with Suggestions for Further Research (2008, unknown): “Bradshaw (2002) Content analysis Investext reports, First Call Real-Time Database, 1998-1999.”