I'm not sure if this is a stupid question or not, but I'll go on with it. So one of the purposes of issuing research reports is to influence investors' decisions onthe underlying assets, and the target prices are predictions of the price movements in the future. Now assume that an analyst has made a perfect forecast on one stock's price, and every potential macroeconomic & market factors are captured by the report. Smelling something now? This is where the contradiction kicks in. If stock prices can be influenced by the issuance of research reports, then all research reports would never be accurate in their target prices because they do not capture the ex ante effect of how their reports might influence the market. If the hypothesis above is true, then I suspect a great concern to the reliability of research reports. And in the future, analysts might have to incorporate assessments of their credibility as a proxy to measure their report's materiality.
What do you guys think?