Author(s)

Shuai Shen

Corresponding Author

Shuai Shen

ABSTRACT

Securities analysts play the role of information intermediary in the capital market, which can alleviate information asymmetry to a certain extent. The title of the best analyst is the honor that every analyst strives for, because it will not only enhance fame, but also bring about a rapid increase in salary and position. Theoretically, high-reputation analysts are superior to other analysts in earnings forecasting ability and professional ethics. With the maturity of the securities market and the steady improvement of analysts' ability, the comprehensive effect of the two factors has slightly improved the accuracy of analysts' earnings forecast. However, with the continuous emergence of estimation techniques and methods, the divergence of analysts' earnings forecast has slightly increased. As users of annual report information, securities analysts play an important role in the analysis and interpretation of annual report information. This paper uses the stock target price forecast issued by securities analysts to provide empirical evidence that can directly reflect psychological expectations for the nominal price illusion. Further research shows that the above findings are not because securities analysts accurately predicted that there would be different investment opportunities for low price stocks and high price stocks in the future, nor are they intended to cater to investors in order to maximize the interests of the securities companies they serve.

KEYWORDS

Securities analysts; Target price; Empirical evidence