Merger and Acquisitions (M&As) provide a plausibly exogenous shock to analysts’ decision to drop, add or maintain coverage of the merged firms. Higher caliber analysts covering the acquiring and target firms before the M&A deal are more likely to cover the merged firm. The majority of target analysts drop coverage of the merged firm following the delisting of the target stock. However, the targ...

Using the unique data of analysts' site visits to Chinese listed companies, we examine whether and how analysts' site visits help improve their forecast performance. We find that the forecast accuracy of analysts improves after they visit the target firms and this improvement still holds after controlling for the concurrent change in the forecast accuracy of analysts who do not conduct site vis...

Moody’s analysts and sell-side equity analysts adjust GAAP earnings as part of their research. We show that adjusted earnings definitions of Moody’s analysts are significantly lower than those of equity analysts when companies exhibit higher downside risk, as measured by volatility in idiosyncratic stock returns, volatility in negative market returns, poor earnings, and loss status. Relative to...

This paper studies the holistic issue of the combination of analyst projection accuracy, diversity, and distribution. It first tracks the earnings per share and sales projections of a number of equity analysts for 17 representative U.S. companies using data from 1978 to 2012. It also compares the analysts’ consensus of earnings per share, sales, rating, and price target zone to identify the deg...

This paper examines the career concerns of security analysts using long histories of their earnings forecasts, job separations and stock coverage assignments. Our findings include the following. Relatively good (accurate) past forecast performance increases the probability that an analyst moves from a low status to a high status (large, prestigious) brokerage house, while relatively poor past f...