An article in the Wall Street Journal this morning talks about the high frequency of compliments analysts state while on earnings conference calls. Apparently flattering company management helps secure "corporate access." This article is properly placed in the Business section if you are curious in reading it.
The phrase “Great quarter, guys” has been uttered by analysts so often on earnings conference calls that it has become a standing joke on Wall Street. There is even a Twitter account, with a skeptical take on earnings news, called @greatquarter.Analyzing more than 16,000 earnings conference calls from almost 500 companies between early 2003 and the middle of 2013, the researchers found that analysts spoke the phrase “great quarter” roughly 3,000 times.
More than half of all calls included some sort of praise from analysts, ranging from “good,” “solid” or “nice” to “amazing,” “incredible,” “phenomenal,” “tremendous” and other craven flattery.
Analysts sucked up to management an average of 2.5 times per call, with the number of compliments going as high as 21 times per call in the most extreme case. In that epic call, when Urban Outfitters announced on May 15, 2008, that its earnings had increased 45%, 19 out of 21 analysts exclaimed “congratulations.”
Anyone have any insight or stories related to these claims? Are they true?
Yes. They'll also sometimes specifically point out metrics that they want to be given more attention, usually when they have the stock as a buy
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