Relationship of Fair Value Estimated by Analysts and Price Movement in Case of ČEZ, a.s. stock

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F61989100%3A27510%2F19%3A10243848" target="_blank" >RIV/61989100:27510/19:10243848 - isvavai.cz</a>

Result on the web

<a href="http://lef.tul.cz/assets/lef_2019_proceedings_.pdf" target="_blank" >http://lef.tul.cz/assets/lef_2019_proceedings_.pdf</a>

DOI - Digital Object Identifier

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Result language

angličtina

Original language name

Relationship of Fair Value Estimated by Analysts and Price Movement in Case of ČEZ, a.s. stock

Original language description

According to the semi-strong form of efficient market hypothesis all the publicly known information are reflected in the price. On the other hand, there are many analysts, usually brokerage firms or banks, who provide the so-called recommendations for stocks. These recommendations consist of the estimated fair value of the stock and the suggested action for investors. In the paper, we focus on the examination of analysts&apos; recommendations in case of publicly traded stock ČEZ, a.s., concretely, we study the relationship between the potential future return as predicted by analysts and truly observed future return, both calculated in one-year period starting the day of recommendation issuance. We find out that there is no relationship between these two returns, which means that the analysts cannot predict the fair value in case of ČEZ, a.s. and therefore their recommendations are useless to the investors. Moreover, we examine the relationship between the percentage change of fair value in two successive recommendations and percentage price change in the same period. From our analysis, we can conclude that the change of fair value is affected by the price change in the same period. These findings are in line with semi-strong market efficiency hypothesis and support this hypothesis.

Czech name

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Czech description

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Type

D - Article in proceedings

CEP classification

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OECD FORD branch

50206 - Finance

Project

<a href="/en/project/GA18-13951S" target="_blank" >GA18-13951S: New approaches to financial time series modelling based on soft computing</a><br>

Continuities

S - Specificky vyzkum na vysokych skolach

Publication year

2019

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Article name in the collection

Liberec Economic Forum 2019 : proceedings of the 14th international conference : 17th-18th September 2019, Liberec, Czech Republic, EU

ISBN

978-80-7494-482-6

ISSN

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e-ISSN

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Number of pages

8

Pages from-to

206-213

Publisher name

Technical University of Liberec

Place of publication

Liberec

Event location

Liberec

Event date

Sep 17, 2019

Type of event by nationality

EUR - Evropská akce

UT code for WoS article

000540987200021