Slow price reactions to analysts' recommendation revisions

Kotaro Miwa, Kazuhiro Ueda

Research output: Contribution to journalArticlepeer-review

4 Citations (Scopus)


This study explores the reasons for the slow price reactions to analysts' recommendation revisions. We predict that analysts' recommendation revisions contain earnings-related information that is not incorporated in analysts' earnings forecasts and that the slow price reaction is attributable to a gradual incorporation of this earnings-related information into stock prices. We find that, consistent with our prediction, stocks with recommendation upgrades subsequently experience more upward earnings forecast revisions than stocks with recommendation downgrades, and that the differences in subsequent stock returns between upgraded and downgraded stocks is attributable to differences between subsequent earnings forecast (especially, FY2 earnings forecast) revisions.

Original languageEnglish
Pages (from-to)993-1004
Number of pages12
JournalQuantitative Finance
Issue number6
Publication statusPublished - Jun 2014
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • General Economics,Econometrics and Finance
  • Finance


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