Investor Target Prices

Shiyang Huang, Xin Liu, Chengxi Yin

Research output: Working paper

Abstract

We argue that investors have a target price as an anchor for the stocks that they own; once a stock exceeds that target price, investors are satisfied and more likely to sell the stock. This increased selling can generate a price drift after good news. Consistent with our argument, using analyst-target-price forecasts as a proxy, we provide evidence that the fraction of shareholders satisfied generates the post-earnings-announcement drift, and stocks with a high fraction of shareholders satisfied experience stronger selling around announcements. This pattern is stronger for stocks with low institutional ownership and high uncertainty.
LanguageEnglish
StatusIn preparation - 2018

Fingerprint

Investors
Target price
Shareholders
Uncertainty
Announcement
Analysts
Institutional ownership
News
Post-earnings announcement drift

Cite this

Huang, S., Liu, X., & Yin, C. (2018). Investor Target Prices.

Investor Target Prices. / Huang, Shiyang; Liu, Xin; Yin, Chengxi.

2018.

Research output: Working paper

Huang, S, Liu, X & Yin, C 2018 'Investor Target Prices'.
Huang S, Liu X, Yin C. Investor Target Prices. 2018.
Huang, Shiyang ; Liu, Xin ; Yin, Chengxi. / Investor Target Prices. 2018.
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