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1. Introduction
Cohen (1997) defines financial analysis as a set of concepts, methods, and instruments that allow for an appreciation of a company’s financial conditions, the risks that affect it, and the level and the quality of its performance. Financial analysis appears to be a rigorous discipline, relying on rational reasoning and advanced techniques. However, proponents of market efficiency theory have questioned the importance and effectiveness of the role of financial analysts: if financial markets are efficient, and if the price of an asset reflects all the relevant and available information, what is the purpose of spending time on analyzing the intrinsic value of an asset? However, the economy is not as perfect as described by classical financial theory. Business also involves conflicts of interest and agency relationships, and information is not available in the same way for everyone. In this context, financial analysis can be seen as “an antidote to informational asymmetries, a moderator of opportunistic temptations to which managers are exposed, and a moral risk reducer that affects investors” (Cohen, 1997). Several studies have focused on the business of financial analysts as producers of information on financial markets. The role of a financial analyst then is to collect information and evaluate companies in order to make recommendations for purchases or sales to both individual and institutional investors (Schipper, 1991).
Nevertheless, over the past two decades, analyst performance has fluctuated in the USA and more recently in Europe. They often failed to prevent certain bankruptcies (Enron, WorldCom, Lehman Brothers, etc.). Researchers blame these professionals for their lack of rigor and the significant deviation of their forecasts from the results announced by the companies analyzed. In addition to these accusations of their incompetence in preventing crises, these professionals sometimes found themselves at the heart of scandals against a backdrop of conflicts of interest and insider trading. This is the case in the Lehman Brothers scandal, in which analysts are accused of fueling this bubble and not having anticipated the deterioration in the financial conditions of major international groups and being insufficiently independent of the financial institutions on which they are making forecasts.
These numerous criticisms of analysts lead us to believe that, on the one hand, they play a key role in the functioning of...