Investor Target Prices

Shiyang Huang, Xin Liu, Chengxi Yin

Research output: Contribution to journalArticlepeer-review

3 Citations (SciVal)
61 Downloads (Pure)


We argue that investors have target prices as anchors for the stocks that they own; once a stock exceeds target prices, 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 satisfied investors generates the post-earnings-announcement drift, and stocks with a high fraction of satisfied investors experience stronger selling around announcements. This pattern is stronger for stocks with low institutional ownership and high uncertainty.

Original languageEnglish
Pages (from-to)39-57
Number of pages19
JournalJournal of Empirical Finance
Early online date12 Aug 2019
Publication statusPublished - 1 Dec 2019


  • Delayed adjustment
  • Forward-looking anchor
  • Fraction of satisfied investors
  • Investor target price
  • Price drift

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


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