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Understanding outlier opinions: Evidence from financial analysts

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  • Du, Qianqian
  • Yu, Frank
  • Yu, Xiaoyun

Abstract

We study the impact of outlier opinions—extreme views voiced by individuals—in financial markets. Using analyst forecasts as a laboratory, we show that the arrival of an outlier forecast subsequently shifts group consensus and prompts more extreme forecasts from peers. Outlier forecasts also elicit stronger market reactions from investors, increased media coverage, and more conservative management guidance. Further analyses reveal that issuing outlier forecasts enhances an analyst's likelihood of being assigned to cover more prominent clients. Outlier forecasts are more prevalent when an analyst's reputation cost is low and information uncertainty is high. These findings suggest that an individual's outlier opinions, despite being rare and extreme, can generate a broad range of market reactions, and the tendency to express such views is situational, likely driven by personal career motives.

Suggested Citation

  • Du, Qianqian & Yu, Frank & Yu, Xiaoyun, 2026. "Understanding outlier opinions: Evidence from financial analysts," Journal of Corporate Finance, Elsevier, vol. 97(C).
    • Handle: RePEc:eee:corfin:v:97:y:2026:i:c:s0929119925002019
    DOI: 10.1016/j.jcorpfin.2025.102933
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    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • G29 - Financial Economics - - Financial Institutions and Services - - - Other

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