If you use TipRanks you may have noticed that when we display analyst ratings, we sometimes refer to the analyst’s action. However, you may not know what this means.
This guide will quickly and easily explain these actions as well as how we define, buy, sell, and hold ratings.
Analyst Actions
These are the five actions we use:
- Initiated coverage
- Upgraded
- Downgraded
- Reiterated/ Maintained
- Assigned
Here’s an example:
Initiated Coverage
We use this action when:
- The analyst has started new coverage on a stock
- The analyst previously dropped coverage, now resumes coverage on the same stock
- The coverage is transferred from one analyst to another in the same firm
- The analyst switches firms and starts coverage on the stock in the new firm
- The analyst assumes coverage on the stock
- The analyst reinstates coverage on the stock
Upgraded
We use this action when:
- The analyst moves the stock rating from Sell →Hold
- The analyst moves the stock rating from Hold → Buy
- The analyst upgraded a stock from Buy →Strong Buy – also here where there is a PT update as well
Downgraded
We use this action when:
- The analyst moves the stock rating from Buy→Hold
- The analyst moves the stock rating from Hold →Sell
Reiterated/Maintained
We use this action when:
- The analyst Maintained/Reiterated his rating and PT (price target)
- The analyst Maintains or Reiterates the Rating but Upgraded the PT
- The analyst Maintains or Reiterates the Rating but Downgraded the PT
- The analyst “Rates” the stock as “Buy/Hold/Sell”
- The analyst “Keeps” the X rating
*** Reiterated and Maintained are interchangeable
Assigned
We use this action when:
- The analyst upgraded a stock from Buy →Strong Buy
- The analyst upgraded a stock from Strong Sell → Sell
- The analyst downgraded a stock from Strong Buy →Buy
- The analyst downgraded a stock from Sell →Strong Sell
- Coverage is reinstated i.e. when the analyst had stopped covering the stock to review estimates, awaiting new test results (for Bio-tech companies), etc.
- The analyst has upgraded/ downgraded the stock. This is the first rating we have for the analyst on the stock and unable to determine the movement of the rating. In other words, we have no other ratings for the stock by the analyst but the rating in question
*** Sometimes, Reiterated /Maintained ratings also appear as “Assigned”.
Types of Analyst Ratings
Analysts rate stocks as Buy, Hold, or Sell.
Buy
These are the words that analysts may use to advise buying a stock, but we treat them all as Buy:
- Outperform
- Market Outperform
- Overweight
- Strong Buy
- Conviction Buy
- Positive
- Accumulate
- Add
- Speculative Buy
Hold
These are the words that analysts may use to advise holding a stock, but we treat them all as Hold:
- Market perform
- Perform
- Equal weight
- In line
- Neutral
- Stay on the sidelines
- Sector weight
- Market weight
- Sector perform
- Peer perform
- Tender – tender is only for companies that are being taken over – will no longer be trading in the future
Sell
These are the words that analysts may use to advise selling a stock, but we treat them all as Sell:
- Underperform
- Market underperform
- Underweight
- Strong Sell
- Conviction Sell
- Negative
- Reduce
We hope this helps! If you have any questions, please contact us at support@tipranks.com.
