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The informational role of analysts’ textual statements

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  • Miwa, Kotaro

Abstract

This study explores the reasons why textual tones in analysts’ reports, a representative qualitative content of analysts’ reports, possess informational value. We predict that analysts use textual statements to disclose fundamental information that is not reflected in their quantitative outputs. Consistent with our prediction, we find that tones predict subsequent revisions in earnings and sales forecasts. Furthermore, the results show that the information contained in the tone differs among analysts with different incentives to utilize the textual statements, supporting the intentional disclosure story. In addition, the lead-lag relationship between textual and quantitative outputs induces a gradual price adjustment to the information contained in the textual statements.

Suggested Citation

  • Miwa, Kotaro, 2022. "The informational role of analysts’ textual statements," Research in International Business and Finance, Elsevier, vol. 59(C).
    • Handle: RePEc:eee:riibaf:v:59:y:2022:i:c:s0275531921001835
    DOI: 10.1016/j.ribaf.2021.101562
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    More about this item

    Keywords

    Analyst report; Textual information; Report tone; Earnings forecasts; Sales forecasts;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G20 - Financial Economics - - Financial Institutions and Services - - - General

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