Abstract
This study examines whether investors can still profit from successive financial analysts' recommendations announced within the same business week. Using a dataset sample of 230 stocks dated from January 1998 till August 2000, our findings indicate that successive upgrades (downgrades) revelation resulted in significant positive (negative) cumulative abnormal returns for a whole week, suggesting extended market reaction to these announcements. Moreover, it seems that the negative news projected by successive downgrades had stronger absolute abnormal returns than the upgrades, suggesting that the market could not predict the change in grades. In the case of opposite successive recommendations (i.e. downgrades followed by upgrades, or upgrades followed by downgrades), the downgrading effect appeared to surmount the positive market reaction to the upgrades. Therefore, integrating subsequent recommendations could reveal clearer investment value for analysts' recommendations, and deserves further consideration when setting portfolio strategies.
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