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

Kód výsledku v 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>

Výsledek na webu

<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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Jazyk výsledku

angličtina

Název v původním jazyce

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

Popis výsledku v původním jazyce

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.

Název v anglickém jazyce

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

Popis výsledku anglicky

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.

Druh

D - Stať ve sborníku

CEP obor

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OECD FORD obor

50206 - Finance

Projekt

<a href="/cs/project/GA18-13951S" target="_blank" >GA18-13951S: Nové přístupy k modelování finančních časových řad pomocí soft-computingu</a><br>

Návaznosti

S - Specificky vyzkum na vysokych skolach

Rok uplatnění

2019

Kód důvěrnosti údajů

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

Název statě ve sborníku

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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Počet stran výsledku

8

Strana od-do

206-213

Název nakladatele

Technical University of Liberec

Místo vydání

Liberec

Místo konání akce

Liberec

Datum konání akce

17. 9. 2019

Typ akce podle státní příslušnosti

EUR - Evropská akce

Kód UT WoS článku

000540987200021