Investopedia
investopedia.com › financial-edge › 0512 › understanding-analyst-ratings.aspx
Understanding Buy, Sell, and Hold Ratings of Stock Analysts
March 17, 2025 - Stock analysts are professional researchers who forecast the likely price changes of a company's stock price. To do that, they evaluate public filings and investigate conditions at stores to determine if the company is effectively utilizing its resources to meet client needs. Fund managers often rely on analyst ratings to make investment decisions, so accurate ratings could mean the difference between millions of dollars of company value.
Charles Schwab
schwab.com › learn › story › buy-hold-sell-what-analyst-stock-ratings-mean
Buy, Hold, Sell: What Analyst Stock Ratings Mean
For example, is "outperform" relative to the entire stock market, an industry index, or the firm's coverage universe? The definitions for ratings must be consistent with plain meaning. A hold can't really be a sell, and a buy can't really be a hold. In addition, the firm must disclose the percentage of securities they rate that receive each rating.
Analyst rating? Who is that and how are the decisions made?
I worked at a high level in equity research for a top tier investment bank. To forecast target prices we build financial models and would use DCF and other methods. A target price is basically a valuation. We had access to data from analysts covering similar stocks and very good access company management. I could often just call the CFO of big firms. My clients were giant global institutional investors or fund managers. Frequently they would have much more experience than we did and might even know the companies better. I had clients who had done my job and covered the same companies ten years ago and has been investing large amounts in them since that time. However, it is important to realize that both research and my own experience shows that the price target is actually among the least valued part of reports for institutional investors. The most valued in my opinion is the ability to spend a lot of time to understand dynamics in the industry and the company’s position within that as well as access to management that allowed me to ask questions directly and privately. It is natural and health for different analysts or brokers to have different opinions. The share price of a listed company is very close to being an example of an efficient market entity. Basically half the market thinks it is undervalued and half think it is overvalued. Good institutional investors often want to see both arguments- for and against and can use that to make the best decision. I always believed that my role as a analyst was to help clients make the best investment decisions, not to make those decisions myself. I have sort of said to analysts who worked for me that if all of our competitors have a “Buy” on a stock and they want to get attention maybe they need to consider a “Sell”. The market needs both. A good investor will be happy to see a buy and a sell rating on a stick they are interested in. They presumably already have a view on the company and industry. So reading the positive and negative cases back-to-back enables them to make decisions. But only institutional investors had access to the research and they paid a lot for it. But the very top clients paid more and go more access. The very top could call and talk to me it an analyst whenever they wanted. But at the end of the day a few random price targets by themselves are useless. More on reddit.com
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February 17, 2024How to determine if an analyst’s stock rating is trustworthy?
Simple. They're never trustworthy. They're salesmen, advertising so that you trade. More on reddit.com
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October 30, 2024What purpose does an analyst's sell/hold/buy rating and target price have on a stock?
I really think that's all there is to it. The more I learn about investing, the more I realize that no one has any fucking idea what is going to happen, much less why it's going to happen. More on reddit.com
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July 24, 2014How much weight do you give analyst ratings?
Morningstar rating holds a lot of weight for me. These companies pour money into research, what fool would I be to ignore them?
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November 2, 2015What does outperform mean in investing?
It means that a particular stock or investment is expected to or has achieved a higher return than a specific benchmark or average, such as a market index or sector average.
trading212.com
trading212.com › learn › investing-101 › stock-outperform
Stock outperform rating: Definition, meaning, examples, how a stock ...
Why do small stocks outperform?
Small stocks have a much higher potential to outperform because they have greater potential for growth and expansion compared to larger, more established companies. Their smaller size allows for more agility and adaptation to market changes, which can lead to higher returns, albeit with increased risk. However, small companies are much more exposed to risk, meaning many small stocks will underperform large stocks.
trading212.com
trading212.com › learn › investing-101 › stock-outperform
Stock outperform rating: Definition, meaning, examples, how a stock ...
Do growth stocks outperform?
On average growth stocks to tend to outperform so-called value stocks but the average performance disguises a much wider variation in performance among growth stocks i.e. if you pick the wrong growth stocks, you can still underperform.
trading212.com
trading212.com › learn › investing-101 › stock-outperform
Stock outperform rating: Definition, meaning, examples, how a stock ...
StockAnalysis
stockanalysis.com › home › articles › what do stock analyst ratings mean? buy, sell, hold, and more
What Do Stock Analyst Ratings Mean? Buy, Sell, Hold, etc.
November 12, 2024 - You may have access to these ratings through your brokerage or stock research website, but there's an easier way to see the ratings for all of the stocks you own or are considering investing in on Stock Analysis. More on this below. Depending on which firm they work at, analysts use varying sets of ratings. For instance, one firm might use Buy, Sell, and Hold; another firm could use Strong Buy, Outperform, Neutral, Underperform, and Strong Sell; and another firm may use the numbers 1–5. But they all mean the same thing.
Benzinga
help.benzinga.com › en › articles › 1618902-what-do-analyst-ratings-mean
What Do Analyst Ratings Mean? | Benzinga Pro Help Center
The Scale of Ratings The analyst ratings scale is a tad trickier than the traditional classifications of "buy, hold, and sell." The various nuances, detailed in the following chart, include multiple terms for each of the ratings (sell is also known as strong sell, buy can be labeled as strong buy), as well as a couple of new terms: underperform and outperform.
Yahoo! Finance
finance.yahoo.com › news › buy-sell-hold-stock-analyst-180414724.html
Buy, Sell or Hold: What Stock Analyst Ratings Mean and How They Can Help You Make Investment Decisions
April 20, 2024 - A “sell” rating means analysts expect share prices to fall. Additional ratings allow analysts to make more specific recommendations. “Strong buy” is the rating analysts use for stocks they believe will perform exceptionally well.
Warrior Trading
warriortrading.com › home › fresh off the blog › stock rating: what they are & why they are important
Stock Rating: What They Are & Why They Are Important - Warrior Trading
January 8, 2025 - Analysts usually assign this rating when they believe the stock will perform similarly to comparable companies within that specific sector or should perform in a way that’s consistent with the market. A hold rating is considered to be better than sell and not better than buy. This means that traders with existing long positions aren’t supposed to sell, but new traders with no positions should not get into the market.
Interactive Brokers
interactivebrokers.com › glossary › analyst ratings (summary)
Analyst Ratings (Summary) | IBKR Glossary | IBKR Campus
April 22, 2025 - The ratings help identify companies with attractive upside potential compared to current prices, relative to the market and/or their industry sector. The analysis includes both the consensus rank (average rating across analysts) and percent upside (how much higher the average price target is ...
Shares
support.shares.io › en › articles › 7466-what-are-analyst-ratings
What are Analyst Ratings? | Help Center
In the app you can see when the last change in the rating of a particular stock was made by the analysts, as well as the number of analysts on whom the rating is based. Strong buy - The top 5% of stocks get this coveted rating. A Strong Buy should outperform the market more than any other rank. Buy - The next 15% of stocks are rated as “Buy”. These stocks should also outperform the market.
Finimize
finimize.com › glossary › analyst-rating
Analyst Rating - Finimize
Analyst ratings are typically categorized as Buy/Outperform/Overweight to express a positive view, Hold/Neutral/Equalweight for a balanced view, or Sell/Underperform/Underweight to express a negative view. These ratings can serve as a snapshot of an analyst’s expectations of a stock's future performance and are therefore helpful in investors’ decision-making.
Trading 212
trading212.com › learn › investing-101 › stock-outperform
Stock outperform rating: Definition, meaning, examples, how a stock gets rated outperform
January 5, 2024 - While 'outperform' ratings suggest a stock is expected to do better than the market benchmark, terms like 'overweight' indicate analysts' belief that the stock will contribute a higher return than the typical stock in the benchmark index. The debate between active and passive investment strategies is ongoing, with active management aiming to outperform the market through stock picking and market timing, whereas passive management, exemplified by index funds, focuses on mirroring market performance, often with lower fees and turnover rates.
Public
public.com › home › learn › how to make sense of wall street analyst ratings
How to make sense of Wall Street analyst ratings | Public.com
September 22, 2022 - Since there’s no universal scale, do a little digging into what the company providing the analyst research means by each rating term. Websites that aggregate analyst ratings (like TipRanks) may be helpful, and they often give ratings on a number scale. Analysts also usually report important financial data and provide projections about earnings per share, revenue, and other information about a stock in an analyst report.
Simpler Trading
simplertrading.com › home › stock analyst ratings and what they mean
Stock Analyst Ratings and What They Mean - Simpler Trading
March 6, 2023 - Some aggregate stock analyst ratings often give stocks a single score that can range from one to five. These rating systems use numbers rather than potentially confusing terminology. When these ratings are aggregated into a single score on a scale of one to five: Most analysts indicate a “buy” or “strong-buy” rating if the average rating is one. If the average rating is close to five, most analysts rate the stock as a sell.
Morgan Stanley
morganstanley.com › eqr › disclosures › webapp › generalresearch
Morgan Stanley - General Research Disclosures
Discover how we help individuals, families, institutions and governments raise, manage and distribute the capital they need to achieve their goals.
Reddit
reddit.com › r/investing › analyst rating? who is that and how are the decisions made?
r/investing on Reddit: Analyst rating? Who is that and how are the decisions made?
February 17, 2024 -
https://imgur.com/a/xeXhUC
I wonder what does analysts do to forecast the target price and how to know if they are trustworthy. Anyone take analyst’s forecast very seriously and actually invest based on that? Looks like analysts and morningstar research come up with different conclusions on Nvidia.
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I worked at a high level in equity research for a top tier investment bank. To forecast target prices we build financial models and would use DCF and other methods. A target price is basically a valuation. We had access to data from analysts covering similar stocks and very good access company management. I could often just call the CFO of big firms. My clients were giant global institutional investors or fund managers. Frequently they would have much more experience than we did and might even know the companies better. I had clients who had done my job and covered the same companies ten years ago and has been investing large amounts in them since that time. However, it is important to realize that both research and my own experience shows that the price target is actually among the least valued part of reports for institutional investors. The most valued in my opinion is the ability to spend a lot of time to understand dynamics in the industry and the company’s position within that as well as access to management that allowed me to ask questions directly and privately. It is natural and health for different analysts or brokers to have different opinions. The share price of a listed company is very close to being an example of an efficient market entity. Basically half the market thinks it is undervalued and half think it is overvalued. Good institutional investors often want to see both arguments- for and against and can use that to make the best decision. I always believed that my role as a analyst was to help clients make the best investment decisions, not to make those decisions myself. I have sort of said to analysts who worked for me that if all of our competitors have a “Buy” on a stock and they want to get attention maybe they need to consider a “Sell”. The market needs both. A good investor will be happy to see a buy and a sell rating on a stick they are interested in. They presumably already have a view on the company and industry. So reading the positive and negative cases back-to-back enables them to make decisions. But only institutional investors had access to the research and they paid a lot for it. But the very top clients paid more and go more access. The very top could call and talk to me it an analyst whenever they wanted. But at the end of the day a few random price targets by themselves are useless.
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https://imgur.com/a/BhoMlob It's not based solely on one analyst but a number of analysts and algorithm made a estimated outcome. If you are not sure, you can check out their success rate and it shows the organization they came from.
Investopedia
investopedia.com › terms › r › rating.asp
Rating: Definition in Finance, How It Works, Types, Agencies
August 28, 2023 - A rating is an assessment tool assigned by an analyst or rating agency to a stock or bond indicating its potential for opportunity or safety.
Freetrade
freetrade.io › home › market news › analyst ratings: how to use them
Analyst ratings: how to use them
September 4, 2024 - The tag line attached to this content is a rating that signals the analysts’ current view of a particular stock. Ratings are designed to squeeze reams of research into a single actionable output for investors: usually buy, hold or sell. In reality, these action points come in different shapes and sizes. A positive view might be headlined with a buy, outperform or overweight, for example. In that instance, while each word might mean something slightly different, they all indicate a positive view and a belief that a stock will deliver better than average returns in the future.
Reddit
reddit.com › r/valueinvesting › how to determine if an analyst’s stock rating is trustworthy?
r/ValueInvesting on Reddit: How to determine if an analyst’s stock rating is trustworthy?
October 30, 2024 -
I’ve been looking at analyst ratings on moomoo, and I’m a bit confused. For instance, when I checked NVDA, I felt it was a “hold” or even “sell” to take profits, yet the rating showed “Strong Buy.” I think analyst ratings often lag behind, but I wonder who these analysts actually are and how they make their decisions. Are most affiliated with investment banks or brokerages, and could their ratings be influenced by this? How do you determine if an analyst is trustworthy?
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Simple. They're never trustworthy. They're salesmen, advertising so that you trade.
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Aaahhh it’s all crap I’ve rechecked many times with back dates almost none of my great picks were out there in those reports. Or it was some and some not. Sounds like they are driven by occurred events and analysis is total junk, almost no value there Buffets purchase announcements are much better reports than those guys lol
Warrior Trading
warriortrading.com › home › fresh off the blog › stock analyst ratings – what do they mean?
Stock Analyst Ratings - What do they Mean? - Warrior Trading
January 8, 2025 - Stock analyst ratings are a measure of the expected performance of a stock in a given time period based on their research.
Rbccm
rbccm.com › en › legal › research › rating-system.page
RBC Capital Markets | Explanation of RBCCM Equity Rating System
An analyst's "sector" is the universe of companies for which the analyst provides research coverage. Accordingly, the rating assigned to a particular stock represents solely the analyst's view of how that stock will perform over the next 12 months relative to the analyst's sector average.
Nasdaq
nasdaq.com › articles › how-to-use-analyst-ratings-to-your-trading-advantage
How to Use Analyst Ratings to Your Trading Advantage | Nasdaq
February 22, 2024 - These ratings can range from bullish ("strong buy" and "buy"), to neutral ("hold"), to bearish ("sell" and "strong sell"). As a whole, a stock's analyst ratings configuration can tell us at a glance how Wall Street feels toward that particular name. Analyst ratings are changed via publicly issued upgrades and downgrades, which are often sparked by corporate events (such as product launches, shareholder meetings, or earnings reports).