Analyst optimism and market sentiment: evidence from European corporate sustainability reporters
This study investigates the effect of investor sentiment on analysts’ optimism bias for a set of European companies with high-quality non-financial information reporting. The contents of the reports should make stock recommendations for such firms that are less prone to sentiment-driven optimism bia...
| Authors: | , , |
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| Format: | article |
| Status: | Published version |
| Publication Date: | 2024 |
| Country: | España |
| Institution: | Universidad Pública de Navarra |
| Repository: | Academica-e. Repositorio Institucional de la Universidad Pública de Navarra |
| OAI Identifier: | oai:academica-e.unavarra.es:2454/50333 |
| Online Access: | https://hdl.handle.net/2454/50333 |
| Access Level: | Open access |
| Keyword: | Financial analysts Optimism bias Investor sentiment Sustainability |
| Summary: | This study investigates the effect of investor sentiment on analysts’ optimism bias for a set of European companies with high-quality non-financial information reporting. The contents of the reports should make stock recommendations for such firms that are less prone to sentiment-driven optimism bias; our observations show this to be the case. For further insight, we analysed the informative value of stock recommendations in high- and low-sentiment periods, taking sustainability reporting quality into account. We find that buy recommendations for high-sustainability stocks have no informational value when sentiment is high, whereas informative recommendations in the form of sell recommendations for low-sustainability stocks appear when sentiment is high. |
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