Target Price Accuracy: International Evidence
Bilinski, Pawel, Lyssimachou, Danielle, Walker, Martin
The Accounting Review · 2013 · Volume 88 · Issue 3
Abstract
Using an international sample of 16 countries, this paper examines if analyst- and country-specific characteristics explain the variation in target price (TP) accuracy. We find that significant variation in average TP accuracy across countries is due to differences in accounting disclosure quality, the origin of the legal system, cultural traits, and IFRS regulation. We also find that analysts exhibit differential and persistent ability to forecast target prices accurately, which confirms that some analysts have superior TP forecasting ability. Data Availability:Data are available from public sources indicated in the text.
Keywords
target prices, forecast accuracy, analyst characteristics, institutional and regulatory differences across countries
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