This paper investigates the informativeness and value relevance of analyst target prices in the context of mergers and acquisitions. Our results indicate that firms with high 12-month ahead target prices relative to current stock prices are more likely to become a takeover target and offer premium, and acquirers’ announcement returns are positively associated with firms’ target price premium. We also show that a long-short trading strategy formed on target prices and firms’ takeover likelihood generates economically significant returns. Our results are robust to a battery of additional analysis, and the informativeness of target prices is not subsumed by other analyst forecast outputs such as earnings forecasts and recommendations. Overall, our findings suggest that analysts convey valuable information through target price forecasts, which are useful for participants in the corporate takeover markets.

中文翻译：

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目标价格预测的信息内容：来自并购的证据

本文研究了并购背景下分析师目标价格的信息量和价值相关性。我们的结果表明，与当前股价相比，未来 12 个月目标价格较高的公司更有可能成为收购目标并提供溢价，收购方的公告回报与公司的目标价格溢价呈正相关。我们还表明，根据目标价格和公司的收购可能性形成的多空交易策略会产生显着的经济回报。我们的结果对一系列额外分析是稳健的，目标价格的信息量并未包含在其他分析师预测输出中，例如盈利预测和建议。总体而言，我们的研究结果表明，分析师通过目标价格预测传达有价值的信息，