Initiating coverage, broker reputation and management earnings forecasts in Australia
Brown, R. Chan, H.W.H. Kee Ho, Y.
Brown, R.
Chan, H.W.H.
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Alternative Title
Abstract
We examine more than 5000 recommendations made by Australian brokers in the period 1996-2001. We find evidence that initiating recommendations produce greater share price responses than continuing recommendations, particularly for hold, underperform and sell recommendations. We also find evidence that initiating recommendations made by higher-reputation brokers and those made in the absence of a management earnings forecast attract different share price responses. Finally, we find that share price responses to initiating recommendations, conditional on the market consensus recommendation, are significantly different to continuing recommendations. © 2007 AFAANZ.
Keywords
Analyst coverage, Broker recommendations, Broker reputation, Management earnings forecasts
Source Title
Accounting and Finance
Publisher
Series/Report No.
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Date
2007
DOI
10.1111/j.1467-629X.2006.00209.x
Type
Article