Analysis of the Costs of the Recommendations of the Financial Analysts in the Colombian Market: 2015-2019

This research aims to study whether the relationship between sell-side analysts' recommendations and return projections are consistent with the assumption that buy recommendations are less costly than sell recommendations. Taking 22 equity assets that make up the COLCAP index of the Colombian Stock Exchange, using daily data for closing prices, target price, buy, sell and hold recommendations for each financial asset, over the period from the beginning of January 2015 to December 31, 2019, the cointegrating equations that allow analyzing in economic terms the existence of a long-term or equilibrium relationship between the series are estimated, finding that in the face of loss projections, the analysts bias their buy recommendations and keep their sell recommendations consistent, as the degree of dispersion of the recommendations remains close to zero (0), so the Womack (1996) hypothesis would not be fulfilled.