Analyst Research Activity During the COVID-19 Pandemic

Abstract

This paper documents that, in response to the COVID-19 pandemic, analysts increase their research activity and significantly revise their forecasts when compared to the pre-pandemic period. Uncertainty-adjusted forecast errors are either comparable or smaller during the pandemic compared to the pre-pandemic period. Investor attention and price reactions to analyst forecast revisions are higher during the pandemic and the effect is stronger in periods where investors actively search for information about firms. During the pandemic, investors value analyst price discovery role more than their role in interpreting public information. Jointly, the results suggest that analysts play an important information intermediation role during the COVID-19 pandemic.