Keywords

data subscriptions, sell-side analysts, diversity of opinion, wisdom of crowds

Abstract

We use disclosed “source” data from analyst reports to infer brokerage financial data subscriptions (FDS) and investigate their effects on analyst research. When brokerages add FDS, their analysts’ forecast accuracy increases. Effect sizes are at least as large as those for analyst experience, busyness, and brokerage size. Benefits are largest for less experienced and busier analysts with less private access to management forecasting over longer horizons. Although adding new FDS benefits individual analysts, there is substantial overlap in FDS across brokerages, leading to homogenized market views. Specifically, when brokerages have overlapping FDS, their analysts’ forecasts, timing, boldness, recommendations, report content, and errors all converge. Consistent with subscription overlap negatively affecting the diversity of analyst opinions, consensus estimates become less accurate and stock return comovement increases when there is more overlap in FDS among analysts. Overall, our findings suggest that FDS are an important and overlooked input into analyst research.

Original Publication Citation

“The Influence of Financial Data Subscriptions on Analyst Research” (with Braiden Coleman and Mark Lang)

Document Type

Working Paper

Publication Date

2025

Language

English

College

Marriott School of Business

Department

Accountancy

University Standing at Time of Publication

Associate Professor

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