Analysts' Consensus and Target Price Accuracy: A Study in Latin America

Detalhes bibliográficos
Autor(a) principal: Antônio,Rafael Moreira
Data de Publicação: 2017
Outros Autores: Ambrozini,Luciana Cardoso Siqueira, Gatsios,Rafael Confetti, Magnani,Vinícius Medeiros
Tipo de documento: Artigo
Idioma: eng
Título da fonte: BAR - Brazilian Administration Review
Texto Completo: http://old.scielo.br/scielo.php?script=sci_arttext&pid=S1807-76922017000400301
Resumo: Abstract Market analysts, by means of issuance of their opinions (earnings per share, target prices, and recommendations), have been the object of several earlier studies. Previous literature identifies analysts as information intermediaries between companies and investors, and identifies their role in reducing the information asymmetry. This study investigates whether the estimated standard deviations of price-target shares issued by capital market analysts are informative, and ascertains whether it is possible to identify smaller errors in analysts' forecasts from the verification of the consensus among them. The study is carried out in Latin American countries, and relies on a database of 23,367 estimates of target-price shares during the period from October 2010 to January 2017. It also takes into account the number of analysts who issued the estimates, the company market value, and the government effectiveness between the countries. The results indicate that the greater the consensus (smaller standard deviation), the smaller the forecast errors. Thus, the standard deviation of target-price estimates presents an informative tool to investors about forecast accuracy. Another important result shows that the greater the government effectiveness, the greater the forecast accuracy of target-price estimates issued by the analysts.
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spelling Analysts' Consensus and Target Price Accuracy: A Study in Latin Americatarget-price sharesmarket analystsforecastsAbstract Market analysts, by means of issuance of their opinions (earnings per share, target prices, and recommendations), have been the object of several earlier studies. Previous literature identifies analysts as information intermediaries between companies and investors, and identifies their role in reducing the information asymmetry. This study investigates whether the estimated standard deviations of price-target shares issued by capital market analysts are informative, and ascertains whether it is possible to identify smaller errors in analysts' forecasts from the verification of the consensus among them. The study is carried out in Latin American countries, and relies on a database of 23,367 estimates of target-price shares during the period from October 2010 to January 2017. It also takes into account the number of analysts who issued the estimates, the company market value, and the government effectiveness between the countries. The results indicate that the greater the consensus (smaller standard deviation), the smaller the forecast errors. Thus, the standard deviation of target-price estimates presents an informative tool to investors about forecast accuracy. Another important result shows that the greater the government effectiveness, the greater the forecast accuracy of target-price estimates issued by the analysts.ANPAD - Associação Nacional de Pós-Graduação e Pesquisa em Administração2017-01-01info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersiontext/htmlhttp://old.scielo.br/scielo.php?script=sci_arttext&pid=S1807-76922017000400301BAR - Brazilian Administration Review v.14 n.4 2017reponame:BAR - Brazilian Administration Reviewinstname:Associação Nacional de Pós-Graduação e Pesquisa em Administração (ANPAD)instacron:ANPAD10.1590/1807-7692bar2017170036info:eu-repo/semantics/openAccessAntônio,Rafael MoreiraAmbrozini,Luciana Cardoso SiqueiraGatsios,Rafael ConfettiMagnani,Vinícius Medeiroseng2017-12-14T00:00:00Zoai:scielo:S1807-76922017000400301Revistahttp://www.scielo.br/scielo.php?script=sci_serial&pid=1807-7692&lng=pt&nrm=isohttps://old.scielo.br/oai/scielo-oai.php||bar@anpad.org.br1807-76921807-7692opendoar:2017-12-14T00:00BAR - Brazilian Administration Review - Associação Nacional de Pós-Graduação e Pesquisa em Administração (ANPAD)false
dc.title.none.fl_str_mv Analysts' Consensus and Target Price Accuracy: A Study in Latin America
title Analysts' Consensus and Target Price Accuracy: A Study in Latin America
spellingShingle Analysts' Consensus and Target Price Accuracy: A Study in Latin America
Antônio,Rafael Moreira
target-price shares
market analysts
forecasts
title_short Analysts' Consensus and Target Price Accuracy: A Study in Latin America
title_full Analysts' Consensus and Target Price Accuracy: A Study in Latin America
title_fullStr Analysts' Consensus and Target Price Accuracy: A Study in Latin America
title_full_unstemmed Analysts' Consensus and Target Price Accuracy: A Study in Latin America
title_sort Analysts' Consensus and Target Price Accuracy: A Study in Latin America
author Antônio,Rafael Moreira
author_facet Antônio,Rafael Moreira
Ambrozini,Luciana Cardoso Siqueira
Gatsios,Rafael Confetti
Magnani,Vinícius Medeiros
author_role author
author2 Ambrozini,Luciana Cardoso Siqueira
Gatsios,Rafael Confetti
Magnani,Vinícius Medeiros
author2_role author
author
author
dc.contributor.author.fl_str_mv Antônio,Rafael Moreira
Ambrozini,Luciana Cardoso Siqueira
Gatsios,Rafael Confetti
Magnani,Vinícius Medeiros
dc.subject.por.fl_str_mv target-price shares
market analysts
forecasts
topic target-price shares
market analysts
forecasts
description Abstract Market analysts, by means of issuance of their opinions (earnings per share, target prices, and recommendations), have been the object of several earlier studies. Previous literature identifies analysts as information intermediaries between companies and investors, and identifies their role in reducing the information asymmetry. This study investigates whether the estimated standard deviations of price-target shares issued by capital market analysts are informative, and ascertains whether it is possible to identify smaller errors in analysts' forecasts from the verification of the consensus among them. The study is carried out in Latin American countries, and relies on a database of 23,367 estimates of target-price shares during the period from October 2010 to January 2017. It also takes into account the number of analysts who issued the estimates, the company market value, and the government effectiveness between the countries. The results indicate that the greater the consensus (smaller standard deviation), the smaller the forecast errors. Thus, the standard deviation of target-price estimates presents an informative tool to investors about forecast accuracy. Another important result shows that the greater the government effectiveness, the greater the forecast accuracy of target-price estimates issued by the analysts.
publishDate 2017
dc.date.none.fl_str_mv 2017-01-01
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dc.language.iso.fl_str_mv eng
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dc.relation.none.fl_str_mv 10.1590/1807-7692bar2017170036
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