Analyst target price revisions and institutional herding

Chen Gu, Xu Guo and Chengping Zhang

International Review of Financial Analysis, 2022, vol. 82, issue C

Abstract: We document that institutional herding behavior is associated with analyst target price revisions even after controlling for the effects of analyst recommendations and earnings forecasts, and provide insights into the price impact of institutional herding. Institutional investors tend to buy the same stocks following an upward target price revision and sell the same stocks following a downward price revision. Moreover, institutional investors tend to overreact to analysts' target price revisions, which exacerbates the mispricing in the stock market. Such price destabilizing effect is particularly pronounced for herding among investment firms.

Keywords: Institutional investor; Herding; Analyst target price revision; Price impact (search for similar items in EconPapers)
JEL-codes: G02 G11 G14 G20 G40 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:82:y:2022:i:c:s1057521922001508

DOI: 10.1016/j.irfa.2022.102189

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