Meetings between analysts and corporate managers in Sweden: why do they exist?

The purpose of this article is, from the perspective of the financial analyst working in Sweden, to explain why financial analysts and managers hold private meetings. In the study, 25 financial analysts have been interviewed using a semi-structured approach. The findings reveal that the primary determinant of the fair value of a business and/or its shares or stock is based on the gut feeling of financial analysts. This, in turn, is based on years of experience, knowledge about the company, industry specialisations and so forth. Financial quantification achieved by the application of models and statistics plays a minor role and although it is not used for determining valuations, it does have applications in terms of rationalising, validating and justifying valuation assessment. To bolster their gut feelings analysts need person-to-person meetings with corporate managers. Both parties use such meetings to influence valuation assessment.