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Article: Investor Target Prices

TitleInvestor Target Prices
Authors
KeywordsDelayed adjustment
Forward-looking anchor
Fraction of satisfied investors
Investor target price
Price drift
Issue Date2019
PublisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/jempfin
Citation
Journal of Empirical Finance, 2019, v. 54, p. 39-57 How to Cite?
AbstractWe argue that investors have target prices as anchors for the stocks that they own; once a stock exceeds target prices, investors are satisfied and more likely to sell the stock. This increased selling can generate a price drift after good news. Consistent with our argument, using analyst-target-price forecasts as a proxy, we provide evidence that the fraction of satisfied investors generates the post-earnings-announcement drift, and stocks with a high fraction of satisfied investors experience stronger selling around announcements. This pattern is stronger for stocks with low institutional ownership and high uncertainty. © 2019 Elsevier B.V.
Persistent Identifierhttp://hdl.handle.net/10722/274548
ISSN
2017 Impact Factor: 0.946
2015 SCImago Journal Rankings: 0.879

 

DC FieldValueLanguage
dc.contributor.authorHuang, S-
dc.contributor.authorLiu, X-
dc.contributor.authorYin, C-
dc.date.accessioned2019-08-18T15:03:55Z-
dc.date.available2019-08-18T15:03:55Z-
dc.date.issued2019-
dc.identifier.citationJournal of Empirical Finance, 2019, v. 54, p. 39-57-
dc.identifier.issn0927-5398-
dc.identifier.urihttp://hdl.handle.net/10722/274548-
dc.description.abstractWe argue that investors have target prices as anchors for the stocks that they own; once a stock exceeds target prices, investors are satisfied and more likely to sell the stock. This increased selling can generate a price drift after good news. Consistent with our argument, using analyst-target-price forecasts as a proxy, we provide evidence that the fraction of satisfied investors generates the post-earnings-announcement drift, and stocks with a high fraction of satisfied investors experience stronger selling around announcements. This pattern is stronger for stocks with low institutional ownership and high uncertainty. © 2019 Elsevier B.V.-
dc.languageeng-
dc.publisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/jempfin-
dc.relation.ispartofJournal of Empirical Finance-
dc.subjectDelayed adjustment-
dc.subjectForward-looking anchor-
dc.subjectFraction of satisfied investors-
dc.subjectInvestor target price-
dc.subjectPrice drift-
dc.titleInvestor Target Prices-
dc.typeArticle-
dc.identifier.emailHuang, S: huangsy@hku.hk-
dc.identifier.authorityHuang, S=rp02052-
dc.description.naturelink_to_subscribed_fulltext-
dc.identifier.doi10.1016/j.jempfin.2019.07.009-
dc.identifier.scopuseid_2-s2.0-85072167617-
dc.identifier.hkuros301113-
dc.identifier.volume54-
dc.identifier.spage39-
dc.identifier.epage57-
dc.publisher.placeNetherlands-

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