Accounting Comparability,Relative Valuation and Analyst Price Forecast
Financial analysts in China's capital market generally use relative valuation method to predict share price,and the effectiveness of the rel-ative valuation method depends on whether the target company is comparable with the comparison companies.We examine the impact of financial statement comparability on the accuracy of analysts'stock price forecast.Taking China's non-financial A-share listed companies from 2006 to 2020 as the sample,we find that the accounting information comparability can improve the accuracy of analysts'share price forecast.The effect is more pronounced when the analysts'ability is low and peer firms have low stock price noise.The mechanism test shows that accounting information comparability can improve the ac-curacy of analysts'stock price forecast by improving the effectiveness of price multiplier prediction.Further analysis finds that when accounting information comparability is high,the investment strategy based on the analysts'stock price forecast can obtain higher returns.These empirical results indicate that ac-counting comparability has a significant impact on the validity of valuation in China's capital market,which makes extensive use of relative valuation meth-ods.This study is helpful to understand and improve the valuation system with Chinese characteristics,and it is instructive for the formulation of account-ing standards in China.
万方数据
维普
