Recent research finds that many analyst recommendation revisions take place shortly
after earnings announcements. Altinkilic and Hansen (2009) attribute the clustering of
recommendations to analysts strategically piggybacking on earnings information to
improve the perceived performance of their recommendations. This study proposes an
alternative view: I find that analysts issue recommendations when they face greater
demand from investors, when the relative supply of information available on earnings
announcements is higher and when they detect mispricings. These results are consistent
with analysts striving to meet the demands of investors by providing useful recommendations after earnings announcements