Date of Award


Degree Type



Economics and Finance


This study aims to uncover the relationship between market frictions, measured by price delay, and consensus analyst recommendations on stocks. Analyst recommendations are publicly available to investors, and under the framework of the Efficient Market Hypothesis, should contribute to the efficiency of a stock’s pricing mechanism by providing information to the market that would otherwise not be available. We find evidence that the more favorable recommended stocks in our sample command a higher price delay than less favorably recommended stocks. In other words, the most optimistically recommended stocks are priced less efficiently than other less favorably recommended stocks. We also find evidence that consensus analyst recommendations affect price delay only for stocks recommended better than “hold”. Stocks with consensus recommendations worse than “hold” do not show a significant relationship between consensus analyst recommendations and price delay. The results are robust to other factors that have been shown to affect delay.


This work made publicly available electronically on August 24, 2012.


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Finance Commons