@article{0eebdb15ce534ee9af1588ff34268918,
title = "Are financial analysts eager postmen of bubble psychology? Evidence in the United Kingdom",
abstract = "This paper examines the investment value of financial analysts' advice (earnings forecasts and stock recommendations) to shareholders around two recent bubble periods in the United Kingdom: the dot-com bubble period and the credit bubble period. We find that analysts' advice is valuable at the firm level, as reflected in their recommendations for high-tech stocks before and after the dot-com bubble burst. However, at the aggregate level, in neither bubble period do we uncover a stable relation between average stock returns and analysts' advice. The key to the lack of predictive power of analysts' advice does not seem to be their predictable nature, as the responsiveness of returns to such news, predicted or not, varies widely around the bubble periods studied.",
keywords = "aggregate earnings, analysts' stock recommendations, bubble psychology, earnings forecasts, earnings–returns relation, financial analysts",
author = "Forbes, {William P.} and {\'A}ine Murphy and Cormac O'Keeffe and Chen Su",
note = "Funding Information: The authors wish to thank for the helpful comments and suggestions from an anonymous reviewer, the Editor (Mark P. Taylor), Stephen J. Brown, Robert S. Hudson, Stewart Jones, Barbara S. Petitt, Pierre-Daniel Sarte, and participants at 2013 Conference on ?Banking, Finance, Money and Institutions: The Post Crisis Era,? University of Surrey. Forbes, Murphy, and O'Keeffe acknowledge the funding provided by the AIB Centre for Business and Finance Research (CBFR) at Waterford Institute of Technology (WIT). Su also thanks financial supports from Newcastle University Business School under the School Pump Priming/Research Fund 2012/13 and the School Impact Fund 2015/16. All remaining errors and omissions are our own. Publisher Copyright: {\textcopyright} 2019 John Wiley & Sons, Ltd.",
year = "2020",
month = jan,
day = "1",
doi = "10.1002/ijfe.1732",
language = "English",
volume = "25",
pages = "120--137",
journal = "International Journal of Finance and Economics",
issn = "1076-9307",
publisher = "John Wiley and Sons Ltd",
number = "1",
}