Analysts' stock recommendations, earnings growth and risk

Peasnell, Kenneth Vincent and Yin, Yuan and Lubberink, Martien (2018) Analysts' stock recommendations, earnings growth and risk. Accounting and Finance, 58 (1). pp. 217-254. ISSN 0810-5391

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A key output of sell-side analysts is their recommendations to investors as to whether they should, buy, hold or sell a company's shares. However, relatively little is known regarding the determinants of those recommendations. This study considers this question, presenting results that suggest that recommendations are dependent on analysts’ short-term and long-term earnings growth forecasts, as well as on proxies for the analysts’ unobservable views on earnings growth in the more distant future and risk. Furthermore, analysts who appear to incorporate earnings growth beyond the long-term growth forecast horizons and risk into their recommendation decisions make more profitable stock recommendations.

Item Type:
Journal Article
Journal or Publication Title:
Accounting and Finance
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This is the peer reviewed version of the following article:Peasnell, K. , Yin, Y. , Lubberink, M. and Wyatt, A. (2018), Analysts’ stock recommendations, earnings growth and risk. Account Finance, 58: 217-254. doi:10.1111/acfi.12202 which has been published in final form at This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.
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04 May 2016 10:12
Last Modified:
11 May 2022 04:50