Sell-side analysts make good predictions in Brazil?

Melquiades Pereira Lima () and Vinicio de Souza Almeida ()
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Melquiades Pereira Lima: Instituto Federal de Educação, Ciência e Tecnologia do RN
Vinicio de Souza Almeida: Universidade Federal do Rio Grande do Norte

Brazilian Review of Finance, 2015, vol. 13, issue 3, 365-393

Abstract: We analyze the performance of consensus forecasts and recommendations of sell-side analysts in Brazil from three measures - bias, accuracy and informativeness. The sample included 195 stocks listed on the BM & FBovespa, 75 brokers and 569 analysts. We apply OLS with panel data for a total of 8477 observations and found: i. optimistic bias and focus on recommendations to purchase, even when the target prices suggest pessimism; ii. analysts learn from mistakes, reducing their biases; iii. optimism in forecasts has positive relationship with the dollar variation and variation with negative interest rate.

Keywords: Security Analysts; Price Forecast; Stock Recommendations; Return Forecast (search for similar items in EconPapers)
JEL-codes: E37 G10 G11 G14 G17 (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:brf:journl:v:13:y:2015:i:3:p:365-393

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