Problem
Wall Street equity research analysts are often cited as the primary voice of insight when it comes to predicting the stock market. These analysts routinely pen in-depth reports on individual stocks that include buy/sell/hold ratings, price targets, earnings forecasts and other potentially useful information for investors and clients.
However, the average investor reading summaries of these reports in the news or listening to analyst commentary and recommendations on financial TV networks may not realize that some analysts may not have an objective opinion on the stocks they discuss.
Task
1. Why does the article say "some analysts may not have an objective opinion on the stocks they discuss."?
2. Discuss the typical differences between the information disclosed by analysts and those by managers in management guidance. What's the relationship between them?
3. Shares of Zoom closed down 16% on Tuesday 23 August 2022, a day after the company released second-quarter results that missed analysts' revenue estimates. What do you think are the possible reasons for the share price drop of a company after missing analysts' forecasts?