5.4 Dealing with Analysts

Providing analysts directly, promptly, and professionally with the relevant facts at suitable intervals and with an appropriate depth of information has become normal practice. Yet opinions differ at listed companies on whether and how influence can be exerted directly on the analysts’ assessments when the consensus diverges significantly from the company’s own estimates or when there is a large variance between the individual estimates of the analysts. The same question is raised when an analyst suddenly issues a «sell» recommendation for a company or adopts an opinion that is in sharp contrast with that of the management. Whatever this answer may turn out to be, the Directive Ad hoc Publicity, lays down the principles of equal treatment and thus also stipulates that no price-sensitive information may be communicated to individual analysts.

The CFA Institute, a training organization for equity analysts, has published a good guide entitled «Best Practice Guidelines Analyst/Corporate Issuer Relations», which can be downloaded free of charge from the link below. It may no longer be totally new, and it is also geared to the US market, but the fundamentals nevertheless fit the bill. ➔ CFA Institute (doi.org/10.2469/ccb.v2005.n7.4004)