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What are analyst ratings?

Analyst ratings are the "buy" and "sell" labels, plus price targets, that investment researchers attach to specific securities. These ratings are based on financial data, earnings reports and conversations with company executives. Should you trust analyst ratings?

Where do analyst ratings come from?

Ratings and recommendations come from stock analysts, who research different securities and work for various institutions, brokerage firms and other financial companies. Analyst ratings are designed to give additional information to investors beyond just what the company is saying, but are analyst ratings reliable?

Why do investors rely on analyst ratings?

As part of their due diligence, many investors rely on analyst ratings. An analyst rating offers an opinion about the valuation of a stock and gives investors an idea into the opportunity available with each stock. The rating is based on a deep dive into a company’s financials including:

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