Abstract:
This research focuses on the role of “sell-side” financial analysts with attention on valuation methods adopted. A very relevant role is taken by valuation methods. As noted, despite academic recommendation, an important part of analyst tend to adopt heuristic methods which do not have a scientific base. Precisely, market ratios reached a significant role in the “hall of fame” of valuation methods employed by financial analysts. It was researched which variables can better explain forecast accuracy. At this purpose, a specific consideration is given to analyst teams respect single analysts. In performing this research, some characterizing elements were used as benchmarks. It was verified which are the main approaches adopted by analyst teams comparing their forecast accuracy results to those of single analyst. It was noted that analyst teams tend to perform better than single analysts in terms of target price accuracy. Overall, this thesis project, supported by quantitative data for improving the scientific relevance, is therefore addressed to demonstrate how analyst teams affect forecast quality still considering that other elements exist that influences reports' accuracy.
