Date of Award
Spring 2020
Degree Name
Bachelor of Science (BS)
Advisor(s)
Lin Tong
Abstract
Analyst equity reports are an important component of investment banking offerings. Their accuracy and impact on stock prices have been a topic of prior research. Most of this research, however, has focused on price targets and recommendations, components of reports that are easily quantified. However, the reasons analysts include in the prose section of their reports have been shown to be an important component of their effect on market prices. Justification-based analysis has, in the past, been based on subjectively-scored metrics, which introduce a number of limitations. We here propose an objective “Reason Words Index” to measure the extent to which analysts rely on reasons in their reports. We analyze several correlations between this metric and equity price action; and interpret the results in the context of Shafir et al.’s Reason-Based Choice.
Recommended Citation
Paye, Jacques, "Equity Research Reports and Reason-Based Choice" (2020). Gabelli School of Business Honors Thesis Collection. 72.
https://research.library.fordham.edu/gabelli_thesis/72
