An Investigation of Analysts' Praise of Management During Earnings Conference Calls

Download or read book An Investigation of Analysts' Praise of Management During Earnings Conference Calls written by Jonathan A. Milian and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Through the textual analysis of a large sample of earnings conference calls, the authors find that analysts praise management on over half of earnings conference calls by saying complimentary phrases such as “congratulations on the great quarter.” The results show that analysts' complimentary phrases reflect the nature of the information released at the earnings announcement. The authors find that the amount of praise by analysts on an earnings conference call is strongly associated with the earnings surprise and to a greater extent the earnings announcement stock return. They also find that there is value to investors in tracking analysts' flattery of management during earnings conference calls, as it predicts abnormal stock returns over the following quarter. The findings, which are incremental to prior research on the tone of earnings conference calls, highlight a previously ignored aspect of analyst feedback.