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Initiating coverage, broker reputation and management earnings forecasts in Australia

Initiating coverage, broker reputation and management earnings forecasts in Australia 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. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Accounting & Finance Wiley

Initiating coverage, broker reputation and management earnings forecasts in Australia

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References (18)

Publisher
Wiley
Copyright
Copyright © 2007 Wiley Subscription Services, Inc., A Wiley Company
ISSN
0810-5391
eISSN
1467-629X
DOI
10.1111/j.1467-629X.2006.00209.x
Publisher site
See Article on Publisher Site

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.

Journal

Accounting & Finance – Wiley

Published: Sep 1, 2007

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