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Financial analysts' bundling across firms: Target prices and stock recommendations

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  • Yu‐An Chen
  • Dan Palmon

Abstract

A rising trend is that analysts bundle earnings forecasts for multiple firms on the same day, and such forecast bundling is associated with low‐quality forecasts. We explore target price bundling and recommendation bundling. Factors driving bundling revisions of an output for multiple firms vary across three outputs: forecasts, target prices, and recommendations. Target price (recommendation) revisions bundled for firms are less informative than stand‐alone revisions. Although consistency in the direction of revisions between different outputs is typically associated with higher perceived quality, consistent revisions between outputs are not associated with higher informativeness of revisions bundled for multiple firms.

Suggested Citation

  • Yu‐An Chen & Dan Palmon, 2023. "Financial analysts' bundling across firms: Target prices and stock recommendations," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 46(4), pages 1047-1102, December.
    • Handle: RePEc:bla:jfnres:v:46:y:2023:i:4:p:1047-1102
    DOI: 10.1111/jfir.12348
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