This study examines whether analyst revisions from peer firms have information transfer effects on focal firms in the same product industry. We find that the focal firm’s stock returns are overall positively associated with peer firms’ analyst revisions. This effect varies with firm-level rivalry: information transfers from non-rival (rival) peer firms’ analyst revisions are positive (negative). Moreover, positive information transfers are much stronger for revisions from peer firms’ common analysts, whose information also leads to increases in short-term return comovement between the focal firm and the peer firm. In addition, industry competition and a firm’s industry position influence the magnitude of information transfers. However, the economic significance of information transfers on the focal firm is much smaller than peer firms’ own market reaction.

Information Transfers from Peer Firms' Analyst Revisions.

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