A content analysis of sell-side financial analyst company reports

A study assesses the information needs of sell-side financial analysts. The content of a sample of 479 sell-side analyst company reports is examined. This sample of reports is stratified by exchange, industry, and size, across 3 recent time periods, and includes reports from over 40 brokerage firms. Analysts base their recommendations primarily on an evaluation of company income, relative to balance sheet or cash flow evaluations. They prefer conservative earnings management that establishes or adjusts discretionary reserves, allowances, and off-balance sheet assets. Analysts also extensively consider nonfinancial information, including company risks and concerns, anticipated changes, competitive position, management, and strategy.