Seminar (Dept. of Accounting)

Title：Long-term Analysis in Analyst Research

Speaker：Hongping Tan, Professor, McGill University

Time：10:00-11:30, March 20 , 2024 (Wednesday)

Venue：Room 1007, Mingde Business Building

Language：Chinese & English

ABSTRACT:

Using textual analysis of a large sample of analyst reports for U.S. firms during 1996 to 2021, we find that reports with more long-term focus are more accurate and less optimistic in earnings forecasts. Market reactions to stock recommendations increase with long-term focus. Long-term focused reports discuss more fundamental valuation parameters such as cash flows, growth rates, risks, and strategic plans. Further analysis shows that coverage by long-term focused analysts alleviates management pressure to take myopic corporate actions. Our findings justify the call for long-term equity analysis to increase the quality of analyst research.