Is the analysis of stock analysts credible?—Evidence from Chinese listed companies

Abstract

With the continuous development of China's stock market, the report issued by stock analysts is an important basis for institutional investors and individual investors to make investment decisions. Based on the analysts' basic rating of stocks, this paper uses the samples of listed companies on GEM to study whether the analysts' rating of stocks has credibility. The results show that according to analysts' rating report can improve the stock return, that is to say, analysts' rating of GEM stock is trustworthy, and investors can obtain the excess return based on analysts' rating report. The research of this paper enriches the research results of stock analysts on whether the stock rating of listed companies on GEM is credible or not, and also reflects the market efficiency of analysts' stock rating on the other hand. At the same time, the research on the credibility of stock rating can help investors to consider more comprehensively when viewing analysts' rating reports, make more rational investment decisions, and better understand the stock market.