--- _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. Financial Markets and Portfolio Management (VHB-JOURQUAL 3 Ranking C). 2012;26(4):405-428. doi:10.1007/s11408-012-0196-z apa: Kanne, S., Klobucnik, J., Kreutzmann, D., & Sievers, S. (2012). To buy or not to buy? The value of contradictory analyst signals. Financial Markets and Portfolio Management (VHB-JOURQUAL 3 Ranking C), 26(4), 405–428. https://doi.org/10.1007/s11408-012-0196-z bibtex: '@article{Kanne_Klobucnik_Kreutzmann_Sievers_2012, title={To buy or not to buy? The value of contradictory analyst signals}, volume={26}, DOI={10.1007/s11408-012-0196-z}, 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.” Financial Markets and Portfolio Management (VHB-JOURQUAL 3 Ranking C) 26, no. 4 (2012): 405–28. https://doi.org/10.1007/s11408-012-0196-z.' ieee: S. Kanne, J. Klobucnik, D. Kreutzmann, and S. Sievers, “To buy or not to buy? The value of contradictory analyst signals,” Financial Markets and Portfolio Management (VHB-JOURQUAL 3 Ranking C), 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.” Financial Markets and Portfolio Management (VHB-JOURQUAL 3 Ranking C), vol. 26, no. 4, Springer, 2012, pp. 405–28, doi:10.1007/s11408-012-0196-z. 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' ...