2010
DOI: 10.2139/ssrn.676327
|View full text |Cite
|
Sign up to set email alerts
|

Target Price Accuracy in Equity Research

Abstract: for helpful comments and suggestions. We are indebted with Sergio Venturini at IMQ, SDA Bocconi and with Christian Brownlees at NYU Stern School of Business Volatility Insititute for support and help in data analysis. We thank Factset and Borsa Italiana for providing additional data. We are especially greateful to the editor (Martin Walker) and an anonymous referee. The authors acknowledge financial support from MIUR-Università Bocconi Ricerca di Base 2005. The ideas expressed in the paper do not necessarily r… Show more

Help me understand this report

Search citation statements

Order By: Relevance

Paper Sections

Select...
2
1
1
1

Citation Types

3
47
0
2

Year Published

2011
2011
2022
2022

Publication Types

Select...
8

Relationship

0
8

Authors

Journals

citations
Cited by 46 publications
(52 citation statements)
references
References 34 publications
3
47
0
2
Order By: Relevance
“…In the US market, Asquith et al (2005) report that 6 For a comprehensive overview of EPS forecast accuracy studies, see Schipper (1991) and Brown (1993) The international evidence with respect to target prices is equally limited. In an Italian study, Bonini et al (2010) report that target price inaccuracy is larger for TPs predicting strong price increases, for larger firms, for loss-making ones, and for stocks with better analyst coverage and stronger momentum. Demirakos et al (2010) find that after controlling for the difficulty of the valuation task, TPs derived from discounted cash flow valuation models are relatively more accurate than TPs produced from price-to-earnings multiples for one out of four TP accuracy measures, using a sample of 94 UK firms during the period 2002-2004.…”
Section: Literature Reviewmentioning
confidence: 99%
See 1 more Smart Citation
“…In the US market, Asquith et al (2005) report that 6 For a comprehensive overview of EPS forecast accuracy studies, see Schipper (1991) and Brown (1993) The international evidence with respect to target prices is equally limited. In an Italian study, Bonini et al (2010) report that target price inaccuracy is larger for TPs predicting strong price increases, for larger firms, for loss-making ones, and for stocks with better analyst coverage and stronger momentum. Demirakos et al (2010) find that after controlling for the difficulty of the valuation task, TPs derived from discounted cash flow valuation models are relatively more accurate than TPs produced from price-to-earnings multiples for one out of four TP accuracy measures, using a sample of 94 UK firms during the period 2002-2004.…”
Section: Literature Reviewmentioning
confidence: 99%
“…His literature search identifies only 14 papers on analyst target prices listed in ABI/INFORM, and only three that look at target prices and earnings forecasts together. In particular, of the three published studies that provide some evidence on TP accuracy, Asquith et al (2005) report only summary statistics on TP accuracy, and Demirakos et al (2010) and Bonini et al (2010) do not examine whether analyst and broker characteristics determine TP accuracy. Bradshaw and Brown (2007), the only other study to examine persistence in analyst target price forecasting accuracy, find no link between past and current TP forecast accuracy in the US market over 1997-2002.…”
Section: Introductionmentioning
confidence: 99%
“…As described earlier, steps related to the past (2, 3, 4) extract information for the historical part, while steps related to the future (6,7,8) construct projections for the future part of a CPM. In between these steps, the aim of step 5 is to build various computational financial routines (e.g.…”
Section: Construction Of a Modelmentioning
confidence: 99%
“…Numerous research papers on sell-side analysis have investigated its accuracy (e.g. [7], [22] and [5]) and impact on financial markets (e.g. [9], [29] and [30]).…”
Section: Introductionmentioning
confidence: 99%
“…They found forecasting accuracy (predicted vs. actual) as very limited with error rates of around 37%. [7] For specifically U.S. stocks and TSP accuracy, we turned to a 2013 study by Bradshaw, Brown, and Hung "Do Sell-Side Analysts Exhibit Differential Target Price Forecasting Ability?" The study tested whether the Actual Stock Price (ASP) met or exceeded the Target Stock Price (TSP) at least sometime within the twelve-month forecast horizon.…”
Section: Review Of Recent Researchmentioning
confidence: 99%