Abstract
Understanding a firm's stock price resilience is crucial in an increasingly uncertain environment. We investigate the impact of financial analysts on a firm's stock price resilience. We find that firms in the Chinese stock market with higher analyst coverage were more resilient during the COVID-19 crisis and had lower pandemic-induced stock price declines, shorter decline and recovery periods, and higher recovery probability. This positive relationship is more prominent for firms with strong star analyst coverage and does not depend on ownership type or firm size. Moreover, analysts help firms attract attention from media and institutional investors, improve corporate governance by improving information disclosure quality (especially for private information), and reduce financial constraints, in turn, firms’ ability to absorb pandemic shocks improves. Overall, we demonstrate that financial analysts play a crucial role in shaping a firm's stock price resilience during crises, particularly for firms with strong star analyst coverage.
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