Please use this identifier to cite or link to this item: https://doi.org/10.21256/zhaw-2276
Title: Do analysts’ recommendations have investment value?
Authors : Meck, Marie-Madeleine
Advisors / Reviewers : Brunner, Hans
Sigg, Anita
Extent : 69
Publisher / Ed. Institution : ZHAW Zürcher Hochschule für Angewandte Wissenschaften
Publisher / Ed. Institution: Winterthur
Issue Date: 2018
License (according to publishing contract) : CC BY-NC-ND 4.0: Attribution - Non commercial - No derivatives 4.0 International
Language : English
Subject (DDC) : 332.6: Investment
Abstract: Financial analysts and their work have attracted the interest of numerous researchers. As the banking sector employs thousands of (mostly sell-side) analysts to cover corporations and to write "independent" research reports in order to issue ‘Buy’, ‘Hold’ or ‘Sell’ recommendations, one can expect to generate excess returns by trading according to analysts recommendation revisions. This means their activities are expected to have value and also banks argue that their equity analysts, who are known as experts within their industries they follow, increase market efficiency. So far, the results of previously conducted research on the United States equity market examined the impact of analysts’ recommendations on stock prices and their publications showed remarkably that analysts add value to the market. Those findings contradict the efficient market hypothesis which states that if the semi-strong and strong form of the hypothesis holds, no excess returns can be achieved by action on fundamental analysis such as analyst reports. The main purpose of this master thesis “Do Analysts’ Recommendations have Investment Value”, was to investigate if analysts’ recommendations issued on corporations included in the Dow Jones Industrial Average during the time period ranging from 2000 to 2017, have investment value. Specifically, it was examined whether it was worthwhile to act upon analysts’ recommendations, issued on the 30 largest and mainly publicly owned companies in the United States. In this context to answer the quoted research question, it was required to answer hypotheses which cover the behavior of analysts’ recommendations, analysts’ preferences regarding coverage of a particular sector, the impact of recommendation upgrades and downgrades on the respective security prices, the relationship between analysts’ recommendations and market sentiments, the impact of analyst coverage and brokerage coverage on security prices.
Departement: School of Management and Law
Publication type: Master Thesis
DOI : 10.21256/zhaw-2276
URI: https://digitalcollection.zhaw.ch/handle/11475/11901
Appears in Collections:MSc Banking and Finance

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