The informational role of analysts’ textual statements

Kotaro Miwa

Research in International Business and Finance, 2022, vol. 59, issue C

Abstract: This study explores the reasons why textual tones in analysts’ reports, a representative qualitative content of analysts’ reports, possess informational value. We predict that analysts use textual statements to disclose fundamental information that is not reflected in their quantitative outputs. Consistent with our prediction, we find that tones predict subsequent revisions in earnings and sales forecasts. Furthermore, the results show that the information contained in the tone differs among analysts with different incentives to utilize the textual statements, supporting the intentional disclosure story. In addition, the lead-lag relationship between textual and quantitative outputs induces a gradual price adjustment to the information contained in the textual statements.

Keywords: Analyst report; Textual information; Report tone; Earnings forecasts; Sales forecasts (search for similar items in EconPapers)
JEL-codes: G10 G14 G20 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:59:y:2022:i:c:s0275531921001835

DOI: 10.1016/j.ribaf.2021.101562

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