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Braveheart: On the divergence of recommendations between normal and star analysts

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  • Zeng, Sipeng
  • Li, Yingmei Esme

Abstract

This paper examines how conflicting recommendations from star analysts and normal analysts predict a firm's future stock price and operating performance. We find that when normal analysts issue bold negative recommendations that contradict the views of star analysts, firms that receive such negative recommendations experience worse stock returns and deteriorating fundamental performance over the following two years. Our study provides new insights into the disclosure of private information by financial analysts.

Suggested Citation

  • Zeng, Sipeng & Li, Yingmei Esme, 2024. "Braveheart: On the divergence of recommendations between normal and star analysts," Economics Letters, Elsevier, vol. 240(C).
    • Handle: RePEc:eee:ecolet:v:240:y:2024:i:c:s0165176524002490
    DOI: 10.1016/j.econlet.2024.111765
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    References listed on IDEAS

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    More about this item

    Keywords

    Bold recommendation; Financial analyst; Star analyst; Buy and Hold Return;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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