Do analyst practices and broker resources affect target price accuracy? An empirical study on sell side research in India

This paper attempts to measure the impact of analyst practices and broker resources on target price accuracy of sell side research. A significant finding is that a more elaborate analyst will produce better target price forecasts. Analyst compensation is significantly and inversely linked with target price accuracy indicating lower salaried analysts are motivated to perform better. The findings indicate that employing more number of analysts per research report has no significant impact on target price accuracy - negative coefficient indicates that team work may not result in better target price forecasts. Though insignificant, long term forecasts reduce target price accuracy.