: Historically, "buy" recommendations were overwhelmingly more common (reaching 74% in mid-2000) than "sell" ratings (only 2%), leading to questions about analyst objectivity. The Stock Selection and Performance of Buy-Side Analysts
: Buy-side "buy" recommendations often result in lower annual market-adjusted returns (2.3%) compared to sell-side ratings (8.2%), though these differences are partly due to the types of firms covered.
: An event study of 313 recommendations issued between 2018–2020 on the OMXS30. stock buy sell ratings
: On average, recommendations do not impose significant "abnormal returns" during the event window, suggesting markets are relatively efficient.
Often used when an analyst is cautious but doesn't want to issue a "sell". : On average, recommendations do not impose significant
: Compares the performance of ratings from buy-side analysts (who work for institutional investors) vs. sell-side analysts (who work for brokerage firms).
Statistically rare; often carries "scarcity value" and can have a larger market impact. Summary of Performance Findings sell-side analysts (who work for brokerage firms)
Research highlights that the "meaning" of a rating often depends on how rare it is within an analyst's total portfolio: Rating Type General Interpretation Frequency Context Analyst believes the stock will outperform its sector. Very common; may be "plentiful" and thus less impactful. Hold Stock is worth keeping but not adding more capital to.