---
_id: '5193'
abstract:
- lang: eng
  text: We study the predictive ability of individual analyst target price changes
    for post-event abnormal stock returns within each recommendation category. Although
    prior studies generally demonstrate the investment value of target prices, we
    find that target price changes do not cause abnormal returns within each recommendation
    level. Instead, contradictory analyst signals (e.g., strong buy reiterations with
    large target price decreases) neutralize each other, whereas confirmatory signals
    reinforce each other. Further, our analysis reveals that large target price downgrades
    can be explained by preceding stock price decreases. However, upgrades are not
    preceded by stock price increases, thereby demonstrating asymmetric analyst behavior
    when adjusting target prices to stock prices. Our results suggest that investors
    should treat recommendations with caution when they are issued with large contradictory
    target price changes. Thus, instead of blindly following a recommendation, investors
    might put more weight on the change in the corresponding target price and consider
    transaction costs.
article_type: original
author:
- first_name: Stefan
  full_name: Kanne, Stefan
  last_name: Kanne
- first_name: Jan
  full_name: Klobucnik, Jan
  last_name: Klobucnik
- first_name: Daniel
  full_name: Kreutzmann, Daniel
  last_name: Kreutzmann
- first_name: Sönke
  full_name: Sievers, Sönke
  id: '46447'
  last_name: Sievers
citation:
  ama: Kanne S, Klobucnik J, Kreutzmann D, Sievers S. To buy or not to buy? The value
    of contradictory analyst signals. <i>Financial Markets and Portfolio Management
    (VHB-JOURQUAL 3 Ranking C)</i>. 2012;26(4):405-428. doi:<a href="https://doi.org/10.1007/s11408-012-0196-z">10.1007/s11408-012-0196-z</a>
  apa: Kanne, S., Klobucnik, J., Kreutzmann, D., &#38; Sievers, S. (2012). To buy
    or not to buy? The value of contradictory analyst signals. <i>Financial Markets
    and Portfolio Management (VHB-JOURQUAL 3 Ranking C)</i>, <i>26</i>(4), 405–428.
    <a href="https://doi.org/10.1007/s11408-012-0196-z">https://doi.org/10.1007/s11408-012-0196-z</a>
  bibtex: '@article{Kanne_Klobucnik_Kreutzmann_Sievers_2012, title={To buy or not
    to buy? The value of contradictory analyst signals}, volume={26}, DOI={<a href="https://doi.org/10.1007/s11408-012-0196-z">10.1007/s11408-012-0196-z</a>},
    number={4}, journal={Financial Markets and Portfolio Management (VHB-JOURQUAL
    3 Ranking C)}, publisher={Springer}, author={Kanne, Stefan and Klobucnik, Jan
    and Kreutzmann, Daniel and Sievers, Sönke}, year={2012}, pages={405–428} }'
  chicago: 'Kanne, Stefan, Jan Klobucnik, Daniel Kreutzmann, and Sönke Sievers. “To
    Buy or Not to Buy? The Value of Contradictory Analyst Signals.” <i>Financial Markets
    and Portfolio Management (VHB-JOURQUAL 3 Ranking C)</i> 26, no. 4 (2012): 405–28.
    <a href="https://doi.org/10.1007/s11408-012-0196-z">https://doi.org/10.1007/s11408-012-0196-z</a>.'
  ieee: S. Kanne, J. Klobucnik, D. Kreutzmann, and S. Sievers, “To buy or not to buy?
    The value of contradictory analyst signals,” <i>Financial Markets and Portfolio
    Management (VHB-JOURQUAL 3 Ranking C)</i>, vol. 26, no. 4, pp. 405–428, 2012.
  mla: Kanne, Stefan, et al. “To Buy or Not to Buy? The Value of Contradictory Analyst
    Signals.” <i>Financial Markets and Portfolio Management (VHB-JOURQUAL 3 Ranking
    C)</i>, vol. 26, no. 4, Springer, 2012, pp. 405–28, doi:<a href="https://doi.org/10.1007/s11408-012-0196-z">10.1007/s11408-012-0196-z</a>.
  short: S. Kanne, J. Klobucnik, D. Kreutzmann, S. Sievers, Financial Markets and
    Portfolio Management (VHB-JOURQUAL 3 Ranking C) 26 (2012) 405–428.
date_created: 2018-10-31T11:34:44Z
date_updated: 2022-01-06T07:01:43Z
department:
- _id: '275'
doi: 10.1007/s11408-012-0196-z
extern: '1'
intvolume: '        26'
issue: '4'
jel:
- G11
- G12
- G17
- G24
keyword:
- Analyst recommendation
- Target price
- Stock performance
- Trading strategy
language:
- iso: eng
main_file_link:
- url: https://link.springer.com/article/10.1007/s11408-012-0196-z
page: 405-428
publication: Financial Markets and Portfolio Management (VHB-JOURQUAL 3 Ranking C)
publication_status: published
publisher: Springer
status: public
title: To buy or not to buy? The value of contradictory analyst signals
type: journal_article
user_id: '46447'
volume: 26
year: '2012'
...