When Companies Favor Bullish Analysts on Calls, Problem Often Follows

One or two quarters after such earnings calls, stocks of the companies have actually tended to fall on unfavorable news, a research study discovered.

By.
Cheryl Winokur Munk

Updated Aug. 2, 2020 8: 30 pm ET.

Be careful of companies that disproportionately contact bullish experts to speak throughout profits conference calls. They tend to later on reveal unfavorable news that drives down their share cost.

That correlation– detailed in a recent research study– can be important for financiers, says Lauren Cohen, the L.E. Simmons teacher in the finance and entrepreneurial management systems at Harvard Company School, who co-wrote the research study.

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