Are Analysts’ Recommendations Informative? Intraday Evidence on the Impact of Time Stamp Delays

• DOI: 10.1111/jofi.12107
• Publication Date: 2013-10-12T01:46:23Z
• Authors: DANIEL BRADLEY; JONATHAN CLARKE; SUZANNE LEE; CHAYAWAT ORNTHANALAI
• Keywords: 13. Climate action; 0502 economics and business; 05 social sciences

ABSTRACTWe demonstrate that time stamps reported in I/B/E/S for analysts’ recommendations released during trading hours are systematically delayed. Using newswire‐reported time stamps, we find 30‐minute returns of 1.83% (−2.10%) for upgrades (downgrades), but for this subset of recommendations we find corresponding returns of −0.07% (−0.09%) using I/B/E/S‐reported time stamps. We also examine the information content of recommendations relative to management guidance and earnings announcements. Our evidence suggests that analysts’ recommendations are the most important information disclosure channel examined.