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Accounting information and analyst stock recommendation decisions: a content analysis approach

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  • Gaétan Breton
  • Richard Taffler

Abstract

We explore the information set used by sell-side equity analysts in their stock recommendation decisions through content analysis of their company reports. In particular, we assess the relative importance of accounting measures compared with non-financial information items. We conclude that whereas accounting information is of fundamental importance to analysts, it is not the only, nor even the most important, source. Financial analysts are equally concerned with the firm's management and strategy and its trading environment in arriving at their investment recommendations. Our results have implications in terms of enhancing the relevance of financial reporting to key user constituencies.

Suggested Citation

  • Gaétan Breton & Richard Taffler, 2001. "Accounting information and analyst stock recommendation decisions: a content analysis approach," Accounting and Business Research, Taylor & Francis Journals, vol. 31(2), pages 91-101.
    • Handle: RePEc:taf:acctbr:v:31:y:2001:i:2:p:91-101
    DOI: 10.1080/00014788.2001.9729604
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    References listed on IDEAS

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