sell side research reports

Join 307,012+ Monthly Readers

Get Free and Instant Access To The Banker Blueprint : 57 Pages Of Career Boosting Advice Already Downloaded By 115,341+ Industry Peers.

• Break Into Investment Banking
• Write A Resume or Cover Letter
• Win Investment Banking Interviews
• Ace Your Investment Banking Interviews
• Win Investment Banking Internships
• Master Financial Modeling
• Get Into Private Equity
• Get A Job At A Hedge Fund
• Recent Posts
• Articles By Category

What’s in an Equity Research Report?

If you're new here, please click here to get my FREE 57-page investment banking recruiting guide - plus, get weekly updates so that you can break into investment banking . Thanks for visiting!

Even though you can easily find real equity research reports via the magical tool known as “Google,” we’ve continued to get questions on this topic.

Whenever I see the same question over and over again, you know what I do: I bash my head in repeatedly and contemplate jumping off a building…

…and then I write an article to answer the question.

To understand an equity research report, you must understand what goes into a  stock pitch first.

The idea is similar, but an ER report is a “watered-down” version of a stock pitch.

But banks have some very solid reasons for publishing equity research reports:

Why Do Equity Research Reports Matter?

You might remember from previous articles that equity research teams do not spend that much time writing these reports .

Most of their time is spent speaking with management teams and institutional investors and sharing their views on sectors and companies.

However, equity research reports are still important because:

• You do still spend some time doing the required modeling work (~15%) and writing the reports (~20%).
• You might have to write a research report as part of the interview process.

For example, if you apply to an equity research role or an equity research internship , especially in an off-cycle process, you might be asked to draft a short report on a company.

And then in roles outside of ER, you need to know how to interpret reports quickly and extract the key information.

Equity Research Reports: Myth vs. Reality

If you want to understand equity research reports, you have to understand first why banks publish them: to earn higher commissions from trading activity.

A bank wants to encourage institutional investors to buy more shares of the companies it covers.

Doing so generates more trading volume and higher commissions for the bank.

This is why you rarely, if ever, see “Sell” ratings, and why “Hold” ratings are far less common than “Buy” ratings.

Different Types of Equity Research Reports

One last point before getting into the tutorial: There are many different types of research reports.

“Initiating Coverage” reports tend to be long – 50-100 pages or more – and have tons of industry research and data.

“Sector Reports” on entire industries are also very long. And there are other types, which you can read about here .

In this tutorial, we’re focusing on the “Company Update” or “Company Note”-type reports, which are the most common ones.

The Full Tutorial, Video, and Sample Equity Research Reports

For our full walk-through of equity research reports, please see the video below:

Table of Contents:

• 1:43: Part 1: Stock Pitches vs. Equity Research Reports
• 6:00: Part 2: The 4 Main Differences in Research Reports
• 12:46: Part 3: Sample Reports and the Typical Sections
• 20:53: Recap and Summary

You can get the reports and documents referenced in the video here:

• Equity Research Report – Jazz Pharmaceuticals [JAZZ] – OUTPERFORM [BUY] Recommendation [PDF]
• Equity Research Report – Shawbrook [SHAW] – NEUTRAL [HOLD] Recommendation [PDF]
• Equity Research Reports vs. Stock Pitches – Slides [PDF]

If you want the text version instead, keep reading:

Watered-Down Stock Pitches

You should think of equity research reports as “watered-down stock pitches.”

If you’ve forgotten, a hedge fund or asset management stock pitch ( sample stock pitch here ) has the following components:

• Part 1: Recommendation
• Part 2: Company Background
• Part 3: Investment Thesis
• Part 4: Catalysts
• Part 5: Valuation
• Part 6: Investment Risks and How to Mitigate Them
• Part 7: The Worst-Case Scenario and How to Avoid It

In a stock pitch, you’ll spend most of your time and energy on the Catalysts, Valuation, and Investment Risks because you want to express a VERY different view of the company .

For example, the company’s stock price is $100, but you believe it’s worth only $50 because it’s about to report earnings 80% lower than expectations.

Therefore, you recommend shorting the stock. You also recommend purchasing call options at an exercise price of $125 to limit your losses to 25% if the stock moves in the opposite direction.

In an equity research report, you’ll still express a view of the company that’s different from the consensus, but your view won’t be dramatically different.

You’ll spend more time on the Company Background and Valuation sections, and far less time and space on the Catalysts and Risk Factors. And you won’t even write a Worst-Case Scenario section.

If a company seems overvalued by 50%, a research analyst would probably write a “Hold” recommendation, say that there’s “uncertainty around several customers,” and claim that the company’s current market value is appropriate.

Oh, and by the way, one risk factor is that the company might report lower-than-expected earnings.

The Four Main Differences in Equity Research Reports

The main differences are as follows:

1) There’s More Emphasis on Recent Results and Announcements

For example, how does a recent product announcement, clinical trial result, or earnings report impact the company?

You’ll almost always see recent news and updates on the first page of a research report:

These factors may play a role in hedge fund stock pitches as well, but more so in short recommendations since timing is more important there.

2) Far-Outside-the-Mainstream Views Are Less Common

One comical example of this trend is how all 15 equity research analysts covering Enron rated it a “buy” right before it collapsed :

Sell-side analysts are far less likely to point out that the emperor has no clothes than buy-side analysts.

3) Research Reports Give “Target Prices” Rather Than Target Price Ranges

For example, the company is trading at $50.00 right now, but we expect its price to increase to exactly $75.00 in the next twelve months.

This idea is completely ridiculous because valuation is always about the range of possible outcomes, not a specific outcome.

Despite horrendously low accuracy , this practice continues.

To be fair, many analysts do give target prices in different cases, which is an improvement:

4) The Investment Thesis, Catalysts, and Risk Factors Are “Looser”

These sections tend to be “afterthoughts” in most reports.

For example, the bank might give a few reasons why it expects the company’s share price to rise: the company will capture more market share than expected, it will be able to increase its product prices more rapidly than expected, and a competitor is about to go bankrupt.

However, the sell-side analyst will not tie these factors to specific share-price impacts as a buy-side analyst would.

Similarly, the report might mention catalysts and investment risks, but there won’t be a link to a specific valuation impact from each factor.

So the typical stock pitch logic (“We think there’s a 50% chance of gaining 80% and a 50% chance of losing 20%”) won’t be spelled out explicitly:

Your Sample Equity Research Reports

To illustrate these concepts, I’m sharing two equity research reports from our financial modeling courses :

The first one is from the valuation case study in our Advanced Financial Modeling course , and the second one is from the main case study in our Bank Modeling course .

These are comprehensive examples, backed by industry data and outside research, but if you want a shorter/simpler example you can recreate in a few hours, the Core Financial Modeling course has just that.

In each case, we started by creating traditional HF/AM stock pitches and valuations and then made our views weaker in the research reports.

The Typical Sections of an Equity Research Report

So let’s briefly go through the main sections of these reports, using the two examples above:

Page 1: Update, Rating, Price Target, and Recent Results

The first page of an “Update” report states the bank’s recommendation (Buy, Hold, or Sell, sometimes with slightly different terminology), and gives recent updates on the company.

For example, in both these reports we reference recent earnings results from the companies and expectations for the next fiscal year:

We also give a “target price,” explain where it comes from, and give our estimates for the company’s key financial metrics.

We mention catalysts in both reports, but we don’t link anything to a specific valuation impact.

One problem with providing a specific “target price” is that it must be based on specific multiples and specific assumptions in a DCF or DDM.

So with Jazz, we explain that the $170.00 target is based on 20.7x and 15.3x EV/EBITDA multiples for the comps, and a discount rate of 8.07% and Terminal FCF growth rate of 0.3% in the DCF.

Next: Operations and Financial Summary

Next, you’ll see a section with lots of graphs and charts detailing the company’s financial performance, market share, and important metrics and ratios.

For a pharmaceutical company like Jazz, you might see revenue by product, pricing and # of patients per product per year, and EBITDA margins.

For a commercial bank like Shawbrook, you might see loan growth, interest rates, interest income and net income, and regulatory capital figures such as the Common Equity Tier 1 (CET 1) and Tangible Common Equity (TCE) ratios:

This section of the report explains how the analyst or equity research associate forecast the company’s performance and came up with the numbers used in the valuation.

The valuation section is the one that’s most similar in a research report and a stock pitch.

In both fields, you explain how you arrived at the company’s implied value, which usually involves pasting in a DCF or DDM analysis and comparable companies and transactions.

The methodologies are the same, but the assumptions might differ substantially.

In research, you’re also more likely to point to specific multiples, such as the 75 th percentile EV/EBITDA multiple, and explain why they are the most meaningful ones.

For example, you might argue that since the company’s growth rates and margins exceed the medians of the set, it deserves to be valued at the 75 th percentile multiples rather than the median multiples:

Investment Thesis, Catalysts, and Risks

This section is short, and it is more of an afterthought than anything else.

We do give reasons for why these companies might be mis-priced, but the reasoning isn’t that detailed.

For example, in the Shawbrook report we state that the U.K. mortgage market might slow down and that regulatory changes might reduce the market size and the company’s market share:

Those are legitimate catalysts, but the report doesn’t explain their share-price impact in the same way that a stock pitch would.

Finally, banks present Investment Risks mostly so they can say, “Well, we warned you there were risks and that our recommendation might be wrong.”

By contrast, buy-side analysts present Investment Risks so they can say, “There is a legitimate chance we could lose 50% – let’s hedge against that risk with options or other investments so that our fund does not collapse .”

How These Reports Both Differ from the Corresponding Stock Pitches

The Jazz equity research report corresponds to a “Long” pitch that’s much stronger:

• We estimate its intrinsic value as $180 – $220 / share , up from $170 in the report.
• We estimate the per-share impact of each catalyst: price increases add 15% to the share price, more patients from marketing efforts add 10%, and later-than-expected generics competition adds 15%.
• We also estimate the per-share impact from the risk factors and conclude that in the worst case , the company’s share price might decline from $130 to $75-$80. But in all likelihood, even if we’re wrong, the company is simply valued appropriately at $130.
• And then we explain how to hedge against these risks with put options.

The same differences apply to the Shawbrook research report vs. the stock pitch, but the stock pitch there is a “Short” recommendation where we claim that the company is overvalued by 30-50%.

And that sums up the differences perfectly: A Short recommendation with 30-50% downside in a stock pitch turns into a “Hold” recommendation with roughly equal upside and downside in a sell-side research report.

I’ve been harsh on equity research here, but I don’t want to disparage it too much.

There are many positives: You do get more creativity than in IB, it might be better for hedge fund or asset management exits, and it’s more fun to follow companies than to grind through grunt work on deals.

But no matter how you slice it, most equity research reports are watered-down stock pitches.

So, make sure you understand the “strong stuff” first before you downgrade – even if your long-term goal is equity research.

You might be interested in:

• The Equity Research Analyst Career Path: The Best Escape from a Ph.D. Program, or a Pathway into the Abyss?
• Private Equity Regulation : 2023 Changes and Impact on Finance Careers
• Stock Pitch Guide: How to Pitch a Stock in Interviews and Win Offers

About the Author

Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street . In his spare time, he enjoys lifting weights, running, traveling, obsessively watching TV shows, and defeating Sauron.

Free Exclusive Report: 57-page guide with the action plan you need to break into investment banking - how to tell your story, network, craft a winning resume, and dominate your interviews

Read below or Add a comment

15 thoughts on “ What’s in an Equity Research Report? ”

Hi Brian, what softwares are available to publish Research Reports?

We use Word templates. Some large banks have specialized/custom programs, but not sure how common they are.

Is it possible if you can send me a template in word of an equity report? It will help the graduate stock management fund a lot at Umass Boston.

We only have PDF versions for these, but Word should be able to open any PDF reasonably well.

Do you also provide a pre constructed version of an ER in word?

We have editable examples of equity research reports in Word, but we generally only share PDF versions on this site.

Hey Brian Can you please help me with coverage initiated reports on oil companies. I could not find them on the net. I need to them to get equity research experience, after which only I will be able to get into the field. I searched but reports could not be found even for a price. Thanks

We have an example of an oil & gas stock pitch on this site… do a search…

https://mergersandinquisitions.com/oil-gas-stock-pitch/

Beyond that, sorry, we cannot look for reports and then share them with you or we’d be inundated with requests to do that every day.

No worries. Thanks!

Hi! Brian! Do u know how investment bankers design and layout an equity research? the software they use. like MS Word, Adobe Indesign or something…? And how to create and layout one? Thanks

where can I get free equity research report? I am a Chinese student and now study in Australia. Is the Morning Star a good resource for research report?

Get a TD Ameritrade to access free reports there for certain companies.

How do you view the ER industry since the trading commission has been down 50% since 2007. And there are new in coming regulation governing the ER reports have to explicitly priced and funds need to pay for the report explicity rather than as a service comes free with brokerage?

In addition the whole S&T environment is becoming highly automated.

People have been predicting the death of equity research for over a decade, but it’s still here. It may not be around in 100 years, but it will still be around in another 10 years, though it will be smaller and less relevant.

Yes, things are becoming more automated, but the actual job of an equity research analyst or associate hasn’t changed dramatically. A machine can’t speak with investors to assess their sentiment on a company – only humans can do that.

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Learn Valuation and Financial Modeling

Get a crash course on accounting, 3-statement modeling, valuation, and M&A and LBO modeling with 10+ global case studies.

Buy-Side vs Sell-Side Analysts

Written by True Tamplin, BSc, CEPF®

Reviewed by subject matter experts.

Updated on December 20, 2023

Get Any Financial Question Answered

Table of contents, buy-side vs sell-side analysts: overview.

Investment research and analysis are essential components of the finance industry. Two main types of analysts, buy-side and sell-side, work to provide investment recommendations and insights to investors. The primary difference between the two is their clients.

Buy-side analysts work for institutional investors such as mutual funds, pension funds , and hedge funds , while sell-side analysts work for investment banks and brokerage firms and provide investment recommendations to individual investors.

Buy-Side Analysts

Buy-side analysts work for institutional investors such as mutual funds, pension funds, and hedge funds. Their primary goal is to provide investment recommendations to their clients to help them achieve their financial goals.

These analysts typically identify undervalued securities to add to their client's portfolios.

The job responsibilities of a buy-side analyst involve conducting extensive research to identify investment opportunities. They examine companies and analyze their financial statements to determine their valuation and growth potential.

Buy-side analysts also evaluate market trends and economic indicators to help predict the performance of different asset classes.

Examples of buy-side firms include Fidelity Investments , BlackRock , and The Vanguard Group . These firms manage large pools of assets for institutional clients and individual investors.

These firms have a long-term investment horizon, and their goal is to generate returns for their clients by investing in undervalued securities.

Sell-Side Analysts

Sell-side analysts work for investment banks and brokerage firms. Their primary goal is to provide recommendations to their clients to help them make informed investment decisions.

They usually focus on evaluating companies and industries to identify investment opportunities for their clients.

Sell-side analysts’ responsibilities involve analyzing companies and industries to identify investment opportunities for their clients. They produce research reports that provide investment recommendations based on their analysis.

Sell-side analysts also meet with company management teams to gather information and insights into their business operations.

JPMorgan Chase , Goldman Sachs , and Morgan Stanley are examples of sell-side firms. These companies offer investment banking , sales, and trading services to institutional and individual clients.

Sell-side analysts provide research reports to their clients to help them make informed investment decisions.

Key Differences Between Buy-Side and Sell-Side Analysts

Buy-side and sell-side analysts have contrasting research focus, client bases, compensation, work-life balance, and career paths.

Research Focus

Buy-side analysts typically classify undervalued securities to add to their client's portfolios. They analyze companies and industries to identify investment opportunities to generate long-term returns for their clients.

Sell-side analysts, on the other hand, scrutinize companies and industries. They produce research reports that provide investment guidance based on their analysis of the companies they cover.

Client Base

Buy-side analysts work for mutual funds, pension funds, and hedge funds. Their clients are institutional investors who have a long-term investment horizon and are focused on generating returns for their client's portfolios.

Sell-side analysts work for investment banks and brokerage firms. Their clients are typically individual investors who have a shorter investment horizon and are looking for investment opportunities that will generate short-term returns.

Compensation

The compensation structure for buy-side and sell-side analysts is also different. Buy-side analysts typically receive a salary and a bonus based on the performance of the funds they manage.

Sell-side analysts are compensated based on the revenue generated by the firm they work for.

Work-Life Balance

Buy-side analysts typically work fewer hours than sell-side analysts since their focus is on long-term investments. Sell-side analysts may work longer hours, including evenings and weekends, to provide timely research to their clients.

Career Paths

Buy-side analysts may eventually move up to portfolio management roles or executive positions within the firms they work for. Sell-side analysts may become research directors or investment bankers.

Buy-Side and Sell-Side Analysts' Pros and Cons

Buy-side and sell-side analysts are two different types of financial analysts that work in the investment industry.

The following are the pros and cons of buy-side analysts:

Buy-Side Analysts Pros

Work directly for investment firms, hedge funds, or other institutional investors, so they have a closer relationship with clients and can provide more personalized advice

Focus on long-term investment strategies and the potential of a company's growth rather than short-term gains, which can lead to higher returns for clients

Have access to proprietary information and data that is not publicly available, which can give them an edge in making investment decisions

Have a broader perspective on the market as they cover a range of industries and companies, which can provide a more diversified investment portfolio

Generally, have more stable and predictable work hours compared to sell-side analysts

Buy-Side Analysts Cons

May have less access to management teams and industry experts, which can limit the depth of their research

May have less exposure to the market as they primarily focus on managing client portfolios rather than trading securities

May have limited career advancement opportunities as they are usually part of a larger investment firm or institution

The following are the pros and cons of sell-side analysts:

Sell-Side Analysts Pros

Work directly for investment banks or brokerage firms, so they have direct access to clients who are looking to buy or sell securities, which can provide more immediate feedback on their analysis

Have more frequent interaction with management teams and industry experts, which can provide more in-depth insights and a better understanding of company operations

Have access to a wider range of resources and research tools, which can allow them to produce more detailed reports

May have more opportunities for career advancement as they can eventually move up to higher positions in the investment bank or brokerage firm

Sell-Side Analysts Cons

May be more focused on short-term gains rather than long-term investment strategies, which can lead to higher volatility and lower returns for clients

May be subject to conflicts of interest as they work for a firm that may have a vested interest in promoting certain securities or investment strategies

May have more unpredictable and stressful work hours due to the fast-paced nature of the industry

Overall, the choice between buy-side and sell-side analyst roles will depend on an individual's career goals, personal preferences, and work style.

Which One Is Right for You?

When choosing between buy-side and sell-side analysis, there are several factors to consider.

One of the main considerations is the type of client you want to work for. If you prefer working with institutional clients and have a long-term investment horizon, then the buy-side analysis may be a better fit for you.

If you prefer working with individual clients and have a shorter investment horizon, then the sell-side analysis may be a better fit.

Another factor to consider is your skill set. Buy-side analysts typically have strong analytical skills and are excellent at identifying undervalued securities. Sell-side analysts, on the other hand, need strong communication skills to convey their recommendations effectively.

The Bottom Line

Understanding the differences between buy-side and sell-side analysts is crucial for anyone interested in pursuing a career in finance or investing.

Buy-side analysts focus on providing investment recommendations to institutional clients with a long-term investment horizon, while sell-side analysts provide investment recommendations to individual investors with a shorter investment horizon.

When choosing between buy-side and sell-side analysis, factors to consider include the type of client you want to work for, your skill set, and the differences in compensation, research focus, and work-life balance associated with each.

Consult a financial advisor or wealth management professional for additional information on buy-side and sell-side analysts. Their personal experience and expertise can guide you in choosing between the two.

Buy-Side vs Sell-Side Analysts FAQs

What is the main difference between buy-side and sell-side analysts.

The main difference between buy-side and sell-side analysts is their clients. Buy-side analysts work for institutional investors such as mutual funds, pension funds, and hedge funds, while sell-side analysts work for investment banks and brokerage firms and provide investment recommendations to individual investors.

What are the job responsibilities of buy-side analysts?

The job responsibilities of buy-side analysts involve conducting extensive research to identify investment opportunities. They analyze companies and their financial statements to determine their valuation and growth potential. Buy-side analysts also evaluate market trends and economic indicators to help predict the performance of different asset classes.

What are the job responsibilities of sell-side analysts?

The job responsibilities of sell-side analysts involve analyzing companies and industries to identify investment opportunities for their clients. They produce research reports that provide investment recommendations based on their analysis. Sell-side analysts also meet with company management teams to gather information and insights into their business operations.

What types of firms employ buy-side analysts?

Buy-side analysts typically work for institutional investors such as mutual funds, pension funds, and hedge funds.

What types of firms employ sell-side analysts?

Sell-side analysts typically work for investment banks and brokerage firms.

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide , a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University , where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website or view his author profiles on Amazon , Nasdaq and Forbes .

Related Topics

• Asset Management Careers
• Asset Management Company (AMC)
• Asset Management Company (AMC) Fees
• Asset Management Company (AMC) vs Brokerage House
• Asset Management Ratios
• Asset Management Trends
• Asset Management vs Hedge Fund
• Asset Management vs Investment Management
• Asset Management vs Private Equity
• Asset Management vs Property Management
• Asset Manager
• Asset-Liability Management
• Benefits of Digital Asset Management
• Benefits of Fixed Asset Management
• Best Hedge Fund Strategies
• Chartered Asset Manager (CAM)
• Crypto Asset Management
• Dogs of the Dow
• Fixed Asset Management
• Greater Fool Theory
• Key Ethical Principles for Asset Managers
• Life Cycle Asset Management
• Oil and Gas Asset Management
• Pros and Cons of Asset-Liability Management
• Real Estate Asset Management
• Real Estate Asset Manager
• Types of Asset Managers
• Understanding Asset Management Cost
• Understanding What an Asset Manager Do
• Winner's Curse

Ask a Financial Professional Any Question

Discover wealth management solutions near you, find advisor near you, our recommended advisors.

Taylor Kovar, CFP®

WHY WE RECOMMEND:

Fee-Only Financial Advisor Show explanation

Certified financial planner™, 3x investopedia top 100 advisor, author of the 5 money personalities & keynote speaker.

IDEAL CLIENTS:

Business Owners, Executives & Medical Professionals

Strategic Planning, Alternative Investments, Stock Options & Wealth Preservation

Claudia Valladares

Bilingual in english / spanish, founder of wisedollarmom.com, quoted in gobanking rates, yahoo finance & forbes.

Retirees, Immigrants & Sudden Wealth / Inheritance

Retirement Planning, Personal finance, Goals-based Planning & Community Impact

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.

Fact Checked

At Finance Strategists, we partner with financial experts to ensure the accuracy of our financial content.

Our team of reviewers are established professionals with decades of experience in areas of personal finance and hold many advanced degrees and certifications.

They regularly contribute to top tier financial publications, such as The Wall Street Journal, U.S. News & World Report, Reuters, Morning Star, Yahoo Finance, Bloomberg, Marketwatch, Investopedia, TheStreet.com, Motley Fool, CNBC, and many others.

This team of experts helps Finance Strategists maintain the highest level of accuracy and professionalism possible.

Why You Can Trust Finance Strategists

Finance Strategists is a leading financial education organization that connects people with financial professionals, priding itself on providing accurate and reliable financial information to millions of readers each year.

We follow strict ethical journalism practices, which includes presenting unbiased information and citing reliable, attributed resources.

Our goal is to deliver the most understandable and comprehensive explanations of financial topics using simple writing complemented by helpful graphics and animation videos.

Our writing and editorial staff are a team of experts holding advanced financial designations and have written for most major financial media publications. Our work has been directly cited by organizations including Entrepreneur, Business Insider, Investopedia, Forbes, CNBC, and many others.

Our mission is to empower readers with the most factual and reliable financial information possible to help them make informed decisions for their individual needs.

How It Works

Step 1 of 3, ask any financial question.

Ask a question about your financial situation providing as much detail as possible. Your information is kept secure and not shared unless you specify.

Step 2 of 3

Our team will connect you with a vetted, trusted professional.

Someone on our team will connect you with a financial professional in our network holding the correct designation and expertise.

Step 3 of 3

Get your questions answered and book a free call if necessary.

A financial professional will offer guidance based on the information provided and offer a no-obligation call to better understand your situation.

Where Should We Send Your Answer?

Just a Few More Details

We need just a bit more info from you to direct your question to the right person.

Tell Us More About Yourself

Is there any other context you can provide.

Pro tip: Professionals are more likely to answer questions when background and context is given. The more details you provide, the faster and more thorough reply you'll receive.

What is your age?

Are you married, do you own your home.

• Owned outright
• Owned with a mortgage

Do you have any children under 18?

• Yes, 3 or more

What is the approximate value of your cash savings and other investments?

• $50k - $250k
• $250k - $1m

Pro tip: A portfolio often becomes more complicated when it has more investable assets. Please answer this question to help us connect you with the right professional.

Would you prefer to work with a financial professional remotely or in-person?

• I would prefer remote (video call, etc.)
• I would prefer in-person
• I don't mind, either are fine

What's your zip code?

• I'm not in the U.S.

Submit to get your question answered.

A financial professional will be in touch to help you shortly.

Part 1: Tell Us More About Yourself

Do you own a business, which activity is most important to you during retirement.

• Giving back / charity
• Spending time with family and friends
• Pursuing hobbies

Part 2: Your Current Nest Egg

Part 3: confidence going into retirement, how comfortable are you with investing.

• Very comfortable
• Somewhat comfortable
• Not comfortable at all

How confident are you in your long term financial plan?

• Very confident
• Somewhat confident
• Not confident / I don't have a plan

What is your risk tolerance?

How much are you saving for retirement each month.

• None currently
• Minimal: $50 - $200
• Steady Saver: $200 - $500
• Serious Planner: $500 - $1,000
• Aggressive Saver: $1,000+

How much will you need each month during retirement?

• Bare Necessities: $1,500 - $2,500
• Moderate Comfort: $2,500 - $3,500
• Comfortable Lifestyle: $3,500 - $5,500
• Affluent Living: $5,500 - $8,000
• Luxury Lifestyle: $8,000+

Part 4: Getting Your Retirement Ready

What is your current financial priority.

• Getting out of debt
• Growing my wealth
• Protecting my wealth

Do you already work with a financial advisor?

Which of these is most important for your financial advisor to have.

• Tax planning expertise
• Investment management expertise
• Estate planning expertise
• None of the above

Where should we send your answer?

Submit to get your retirement-readiness report., get in touch with, great the financial professional will get back to you soon., where should we send the downloadable file, great hit “submit” and an advisor will send you the guide shortly., create a free account and ask any financial question, learn at your own pace with our free courses.

Take self-paced courses to master the fundamentals of finance and connect with like-minded individuals.

Get Started

Hey, did we answer your financial question.

We want to make sure that all of our readers get their questions answered.

Great, Want to Test Your Knowledge of This Lesson?

Create an Account to Test Your Knowledge of This Topic and Thousands of Others.

Get Your Question Answered by a Financial Professional

Create a free account and submit your question. We'll make sure a financial professional gets back to you shortly.

To Ensure One Vote Per Person, Please Include the Following Info

Great thank you for voting..

Seeing Is Believing

Sell-side Equity Research in a Nutshell

Updated: April 2 2023

By: Noah Edis

There’s a reason Wall Street banks are known as “The Sell-Side” – it’s because their primary business is to help companies raise money by selling stocks and bonds. And the people who work in this division are called equity researchers, or just “analysts.”

Their job is to study individual companies and figure out whether they’re a good investment. They track things like earnings, revenue, and profit margins, and then make reports for their clients to guide them about whether or not to buy or sell shares of that company’s stock.

But it’s not just about picking winning stocks. Equity researchers are also responsible for coming up with new investment ideas and helping to shape the overall market outlook. To do that, they need a solid understanding of financial statements and accounting concepts, as well as experience in fundamental analysis and valuation.

But how does this impact your investment choices? Let’s take a closer look.

What Do Sell-Side Equity Research Analysts Do?

Sell-side equity research analysts are responsible for providing analysis and reports for clients, typically institutional investors such as hedge funds, mutual funds, and pension funds.

The sell-side equity research department is responsible for the generation of new ideas and the production of high-quality analysis. The department is usually divided into sector teams, each of which covers a particular industry or group of companies.

These are analysts and associates. Analysts are the people who produce the actual research reports, while associates support them by conducting fieldwork, gathering data, and performing other tasks.

Their work process can be categorized into three main tasks:

• Information Gathering

Sell-side equity analysts are responsible for gathering information about the companies that they cover. This includes both financial information and non-financial information.

Research analysts can obtain financial information from a variety of sources, including company filings, earnings calls, and analyst presentations. On the other hand, they can gather non-financial information through fieldwork, such as meeting with company management or visiting factories.

Once the necessary information has been gathered, it must be analyzed to make investment reports. This analysis typically takes the form of financial modeling, which is used to forecast a company’s future performance.

• Report Writing

Sell-side equity research reports contain information on companies’ past performance, current situation, and future prospects. It also includes the analyst’s rating (e.g., buy, hold, or sell) and price target for the stock. The reports are then distributed to the firm’s clients to help them make investment decisions.

Buy-Side vs. Sell-Side Analysts: What’s The Difference?

The main difference between buy-side and sell-side analysts is the type of client that they work for. Buy-side analysts work for institutional investors, such as hedge funds and mutual funds. Meanwhile, sell-side analysts work for banks and other financial institutions.

Another difference is the type of research that they produce. Buy-side analysts tend to produce more in-depth, fundamental research. In contrast, sell-side analysts tend to produce shorter, more concise research reports.

A final difference is the compensation structure. Buy-side analysts are typically paid a salary plus a bonus based on their performance. On the other hand, sell-side analysts are typically paid a salary plus a commission based on the number of research reports they sell.

What Is The Difference Between Equity Research And Investment Banking?

There is some overlap between equity research and investment banking, as analysts at investment banks may also do research on companies. However, the two functions are separate, and analysts typically specialize in one or the other.

Basically, investment bankers are responsible for helping companies raise money by issuing and selling securities. Equity researchers, on the other hand, provide analysis of publicly traded companies.

What Is The Difference Between An Analyst And An Associate?

An analyst is typically the title given to someone who has been working in equity research for a few years and has gained some experience. In contrast, an associate is someone new to the field and still learning the ropes.

Analysts typically have more responsibility than associates, such as creating reports and making client presentations. They may also be involved in meeting with company management and other investors.

Associates typically assist analysts in their work and learn from them. They may also have some responsibility for creating reports, but their primary role is to learn about the industry and the market.

What Is a Sell-Side Equity Research Report?

An equity research report is a document that provides an in-depth analysis of a particular stock. The report typically includes a company overview, financials, valuation, and analyst commentary.

The main purpose of an equity research report is to help investors make informed decisions about whether or not to invest in a particular stock. The report should provide an objective overview of the company’s financials and valuation, as well as the analyst’s opinion on the stock.

Here are the typical components of an equity research report:

• Company overview – This section provides a brief overview of the company, including its business model, key products and services, and competitive landscape.
• Financials – This section includes a detailed breakdown of the company’s financial performance, including revenue, operating income, net income, and EPS.
• Valuation – This section provides a valuation of the company, including its price-to-earnings (P/E) ratio and enterprise value-to-EBITDA (EV/EBITDA) ratio.
• Analyst commentary – This section includes the analyst’s opinion on the stock, including whether or not it is a buy, sell, or hold.
• Investment risks – This section discusses the key risks associated with investing in the company.
• Catalyst – This section includes a discussion of the key events or factors that could impact the company’s stock price.

Different types of sell-side equity research reports

There are three main types of equity research reports:

• Top-down analysis – This type of report starts with a macroeconomic overview of the market, then drills down to individual sectors and companies.
• Bottom-up analysis – This type of report starts with a detailed analysis of individual companies, then drills up to sector and market level.
• Hybrid analysis – This type of report combines elements of both top-down and bottom-up analysis.

Why Sell-Side Equity Research is Valuable

Sophisticated professional investors.

The main customers of sell-side equity research are professional investors, such as money managers, hedge funds, and pension funds. These investors rely on research reports to help them make informed investment decisions. Outside suggestions may be of limited value because you will almost definitely do your own due diligence before investing.

Mitigate Risk

One of the primary goals of sell-side equity research is to help mitigate risk for investors. By providing accurate and timely information, analysts can help investors avoid making costly mistakes in their stock picks.

Get an Edge on the Competition

Many professional investors subscribe to multiple research reports to get a broad overview of the market. This gives them an edge over investors who only rely on their own analysis.

Get Unbiased Information

Remember that analysts are not always right about their analyses. However, by subscribing to a variety of research reports, you can get a more balanced view of the market and make better investment decisions. In addition, sell-side equity research informs investors of the latest news and developments in the constantly changing equity market.

Enhanced Corporate Access

Regulations make it impossible for corporate management teams to selectively provide important information to investors, posing a problem for huge fund managers who frequently require precise information when appraising a stock.

To get around this, fund managers frequently attend meetings sponsored by sell-side companies with contacts with executives of their research subjects, where they may meet company management teams.

Sell-side businesses’ institutional customers can also convey the most important issues they wish to see addressed by corporate management in quarterly earnings conference calls and reports.

Idea Generation

Sell-side equity research reports can be a valuable source of investment ideas. By reading these reports, you can get a better understanding of the companies that interest you and the stocks worth watching.

Creating Context

For skilled investors, reports may be most valuable as a way to establish a meta viewpoint. Short-term variables significantly impact stock values, so investors may learn about price fluctuations by keeping an eye on the whole research environment.

Consuming research also enables investors to assess the temperature of the sector and compare current conditions to previous happenings. In the market, history tends to repeat itself, thanks in part to the industry’s inclination to shake during collapses and attract new professionals during bull runs.

Having a detached viewpoint can help illuminate cyclical tendencies, making it simpler to spot alarming signs that might otherwise go unnoticed by the untrained eye. As a result, new investment possibilities are generated.

That said, investors should avoid research that just reinforces their own prejudice – a powerful factor that has undoubtedly contributed to market booms and collapses in the past.

Challenges When Choosing a Sell-Side Equity Researcher

Many analyst reports are available for free on the internet. The sheer number of firms providing sell-side equity research can be overwhelming for investors.

So how can you determine which research reports are worth your time and money?

Here are a few factors to consider when choosing a sell-side equity research analyst:

• Consider the firm’s reputation

First is the reputation of the sell-side equity research firm. Does the firm have a good track record? Are its reports well-regarded by other investors?

• Consider the analyst’s experience

Second, consider the experience of the analyst who wrote the report. How long has the analyst been covering the stock? Does the analyst have a good track record?

• Consider the firm’s coverage universe

Third, consider the firm’s coverage universe. Does the firm cover a lot of stocks or just a few? If the firm only covers a few stocks, is your stock one of them?

• Consider conflicts of interest

Fourth, be aware of any potential conflicts of interest. Does the firm have a banking relationship with the company? Does the firm’s parent company have a business relationship with the company?

• Consider the price

Finally, consider the price. How much does the report cost? Is it worth the price for the information it provides?

These are just a few factors to consider when choosing a sell-side equity research analyst. Ultimately, you should use your own judgement to decide which reports are worth your time and money.

However, what if there’s a way to view all these analysts’ price targets and ratings in one place?

Welcome to AnaChart. AnaChart is the only website that shows analysts’ past and present action. Other sites present current price targets, but none show previous ones for users to get context other than AnaChart.

Easily find and follow any analyst that outperforms the market. AnaChart assists you in determining which analyst price goals and ratings are essential so that you can feel more confident in your investments and spend less time worrying.

AnaChart’s simple, elegant design makes it easy to find and track the analysts you care about. Simply enter a ticker symbol to view an interactive chart of the stock price over time.

By comparing it to the previous day’s close, you can also see how much the stock has risen or fallen above and below the strike price over time.

You can also view the price target history for each analyst. This way, you can quickly and easily see how accurate the analyst has been in the past and get an idea of whether or not their current ratings are likely to be accurate.

In addition to price targets, you’ll also see analyst ratings (strong buy, buy, hold, underperform, sell) on the chart. This lets you quickly see how bullish or bearish the analysts are on a particular stock.

Also, outside ratings and price targets, you will get the following:

• Line per analyst per stock — separately and together
• Duration since the last posted price target
• The frequency of stock prices realizing price targets
• The average time it takes for price targets to be realized
• Performance scores for stocks so you can identify which analyst model works best
• Statistics regarding average success on analysts price targets fulfillment and average duration in doing so

AnaChart is the only website that provides all this information in one place. So, if you’re looking for an easy way to find and follow the best sell-side equity research, AnaChart is the place to go.

• Search Search Please fill out this field.

Sell-Side Analysts

Buy-side analysts, independent analysts, research report public disclosure, analyst objectivity, the bottom line.

• Guide to Microeconomics

3 Types of Analysts: Which Is Best for You?

Financial analysts are financial industry professionals employed by various institutions including banks, brokerages, pension funds, mutual funds, investment banking firms, hedge funds, and insurance companies.

Their role is to provide guidance for the investment activities of companies and individual investors. They do so by conducting research on companies, industries, and sectors and providing reports that include findings, conclusions, and recommendations.

Analysts fall into the three basic categories of sell-side analysts, buy-side analysts, and independent analysts. They focus on different kinds of clients with different standards and expectations.

Read on to discover more about each and whether they may be a good match for your investment needs.

Key Takeaways

• Sell-side analysts are employed by investment banking firms and brokerages to analyze companies and write in-depth reports after conducting primary research. 
• Buy-side analysts are employed by hedge funds, pension funds, and fund managers like Fidelity and Janus, and they generally specialize in a few industries or sectors.
• Independent analysts are employed by neither brokerage firms nor mutual/pension funds and provide objective research that's not influenced by investment banking deals.
• Some independent firms focus on institutional clients and are paid a fee to follow certain stocks and/or to find new ideas that the sell-side is missing.
• Other indies provide research to both institutional and individual investors.

What They Do

Sell-side analysts generally dominate the headlines. They are employed by investment banking firms and brokerage houses to analyze companies and write in-depth reports after conducting what is sometimes called primary research.

Reports reflect the analyst's research, financial estimates, price targets, performance expectations, and purchase recommendations. These reports are used to sell investment ideas to investment banking firm or brokerage clients, whether individual or institutional investors.

Normally, such extensive research is free to clients. For example, to get free research from Merrill Lynch, you need to have an account with Merrill Lynch online or via a personal broker. Or, sometimes the reports can be purchased through a third party. Institutional clients (e.g., mutual fund managers ) get research from the brokerage's institutional brokers. 

How They Do It

Researching and writing a research report is a time-consuming process. An analyst obtains information for their report by researching a company's filings with the Securities and Exchange Commission (SEC) , meeting with its management, and if possible, talking with its suppliers and customers.

The sell-side analyst makes sure that their research report contains a detailed analysis of a company's competitive advantages and provides information on management's expertise and how the company's operating and stock valuation compares to a peer group and its industry. This peer companies comparison can help investors better understand the differences in operating results and stock valuations.

The typical report also contains an earnings model and clearly states the assumptions used to create the forecast.

This rigorous process limits a typical sell-side analyst to two or three industries and about 10 to 15 companies.

Potential Pitfall for Investors

The challenge facing the investment banks and brokerages is that it's extremely expensive to create all this research. Brokerages must recover the costs of paying sell-side analysts from somewhere, but deregulation has significantly reduced the ability to make a profit on anything except investment banking deals.

As a result, research departments cannot research smaller companies that do not have a potential investment bank deal in the pipeline (which may also indicate a potential conflict of interest that investors should be aware of). This leaves thousands of great companies without coverage.

Couple this with the fact that research departments drop coverage rather than issue sell recommendations, and you'll get the perception that analysts only issue buy recommendations.

Buy-side analysts are employed by fund managers like Fidelity and Janus, as well as insurance companies, pension funds, private equity firms, and hedge funds. Like the sell-side analyst, the buy-side analyst specializes in a few sectors and analyzes stocks to make buy/sell recommendations.

However, the buy-side differs from the sell-side in three main ways:

• They follow more stocks (30 to 40)
• They write very brief reports (generally one or two pages)
• Their research is only distributed to the fund's managers.

Buy-side analysts can cover more stocks than sell-side analysts because they have access to all the sell-side research. They also have the opportunity to attend industry conferences, hosted by sell-side firms.

During these conferences, the executives of several companies in a sector present their cases of why they are a worthwhile investment. After gathering this information, buy-side analysts summarize their findings in a brief report that also contains an earnings forecast .

The sell-side companies provide research and conferences to the buy-side companies in the hopes that the latter will execute large trades through them when clients act on the recommendation provided in the sell-side research.

Thus, to compensate the brokerage firms that provide what they perceive as the best financial information, funds will buy and sell stocks through them.

Merrill Lynch analyst Henry Blodget was a poster boy for the conflict of interest between brokerage house research and stock recommendations after the dot-com bubble burst in the early 2000s and investors lost billions. He was banned from the financial industry for life for making buy recommendations publicly but disparaging companies privately.

Independent analysts are not employed by either brokerage firms or mutual/pension funds. "Indies," as they are sometimes called, are firms that provide objective research that is not influenced by investment banking deals.

They often cover companies ignored by Wall Street firms, such as companies with smaller market capitalizations.

Some independent analysts focus on serving institutional clients and are paid a fee to follow certain stocks and/or to find new ideas that the sell-side is missing.

In some cases, these institutional indies have a relationship with a brokerage firm and are compensated by trades that the brokerage executes for the funds. Or, sometimes the relationship is fee-only.

Other independent analysts provide their research to both institutional and individual investors on a subscription basis or for free.

In either case (and with any type of financial analyst), it is important to understand the nature of the relationship between the financial analyst, the requester of the research (e.g., a brokerage), and the company being analyzed (generally called the subject company).

Independent analysts attempt to bridge the information gap by providing research on stocks not covered by most Wall Street firms. While the internet revolution has increased the ability of individual investors to conduct their own research, it takes time and experience to do a thorough job. Legitimate indies can gather and interpret useful information, saving investors from doing the legwork.

Indies play an important role in today's market by providing research on small and  micro-cap stocks ignored by traditional brokerage research departments. Wall Street has become focused on big-cap stocks and pleasing big institutional investors.

Every research report is required to have a disclaimer that discloses, among other things, the nature of any relationship between the research firm and the subject company.  This disclaimer generally appears at the end of the report and is in a small type. In it, the research firm must disclose if and how it is compensated for providing research. For example, major Wall Street firms will disclose that they provided investment banking services to the subject company.

The objectivity of research reports is a major concern with both the large Wall Street firms and independent analysts. Is Wall Street's research objective? Are sell-side analyst reports trustworthy if tied to high-vale investment banking deals? Can an independent analyst provide an objective research report if it is paid by the subject company? These are difficult questions to answer without reading a report, its disclosure, and knowing something about the firm and the analyst.

Just as with Wall Street firms in general, most firms and their analysts strive to meet a higher standard of ethical conduct while others just try to sell products and manipulate stocks. It is an investor's responsibility to understand and evaluate the integrity of the research information that they receive.

What Is a Good Success Rate for a Financial Analyst?

According to research by TipRanks, the average success rate of the 25 best performing analysts, measured as the percentage of profitable recommendations over a year, was 67.6%, and their average returns from 2011-2020 outperformed the S&P 500 by 21%. Over the same period the average analyst actually underperformed the S&P by 1.27%. For December 2022, three top performing analysts had transaction success rates of 77%, 68%, and 74%.

What Is an Independent Financial Analyst?

Independent analysts work for themselves or for small independent research firms and provide research to smaller investment firms or wealthy individual investors. Because they do not work for a large sell-side or buy-side institution, they are sometimes perceived of as making more objective recommendations.

How Much Do Wall Street Analysts Make?

According to the latest data provided by the U.S. Bureau of Labor Statistics , the median wage for financial and investment analysts is $91,580. This number will vary based on seniority, the size of the firm, and the skill of the analyst. For example, the highest 10% earned more than $166,560 annually.

Investment research from the three types of financial analysts—sell-side, buy-side, and independent—can be valuable for investors. But it's important that investors judge that research with a clear understanding of the roles of each analyst and any potential conflict of interest.

Whether or not an investor has misgivings about what an analyst recommends, they can always simply focus on the wealth of information provided within a report and come up with their own conclusions.

Merrill Lynch. " Research & Insights ."

CFA Institute. " How to Write a Great Research Report ."

Groysberg, B., Healy, P., and Chapman, C. Buy-side vs. sell-side analysts’ earnings forecasts.  Financial Analysts Journal , vol. 64, no. 4, 2008, pp. 25-39.

Hobbs, J., & Singh, V. A comparison of buy-side and sell-side analysts.  Review of Financial Economics , no. 24 , 2015, pp. 42-51.

FINRA. " 2241. Research Analysts and Research Reports ."

PR Newswire. " TipRanks Identifies the Top 25 Analysts of the Decade ."

TipRanks. " Know Who to Trust! Here are the Top 10 Analysts of December 2022, According to TipRanks ."

U.S. Bureau of Labor Statistics. " Financial Analysts: Pay ."

• Terms of Service
• Editorial Policy
• Privacy Policy
• Your Privacy Choices

• 10 min read

Buy Side vs Sell Side Analysts: Which is Best? (A detailed Analysis)

Discover the key differences between buy side and sell side analysts to determine which role may be best suited for your career aspirations.

Key differences between buy side and sell side analysts

Buy side analysts work for investment firms and manage investment portfolios on behalf of their clients, such as hedge funds, mutual funds, and pension funds. Sell side analysts, on the other hand, work for brokerage firms and provide investment recommendations to clients.

While buy side analysts focus on making investment decisions and managing portfolios, sell side analysts primarily provide research and analysis to support investment recommendations.

Buy side analysts typically have a long-term investment horizon and aim to generate returns for their clients over several years. Sell side analysts, on the other hand, often have a shorter-term perspective and provide recommendations based on market conditions and short-term trends.

Buy side analysts often have more flexibility in their investment decisions and can take larger positions in individual stocks or other investments. Sell side analysts, on the other hand, are more limited in their ability to take positions and are often subject to regulatory restrictions.

Buy side analysts usually have a closer relationship with the companies they invest in and may have access to company management and information that is not available to sell side analysts.

Overall, the key difference between buy side and sell side analysts lies in their roles and responsibilities within the investment industry.

Responsibilities of Buy-Side Analysts

Buy-side analysts play a crucial role in the financial industry, focusing on optimizing portfolio performance and managing risk for institutional investors. Their responsibilities include:

Conducting Research and Analysis on Potential Investment Opportunities: Buy-side analysts perform in-depth research using various tools to identify investment opportunities.

Evaluating Financial Statements, Industry Trends, and Market Conditions: They analyze financial statements, industry trends, and market conditions to make informed investment decisions.

Building Financial Models and Forecasting Future Performance of Companies: Buy-side analysts create financial models to project potential returns and forecast the performance of companies.

Monitoring and Managing Existing Investments in the Portfolio: They continuously monitor and manage existing investments to ensure they align with the investment strategy and risk tolerance.

Meeting with Company Management and Industry Experts: Buy-side analysts engage with company management and industry experts to gather insights and information that influence investment decisions.

Keeping Up-to-Date with Market News and Developments: They stay informed about market news and developments to adapt investment strategies accordingly.

Communicating Investment Recommendations to Portfolio Managers and Clients: Buy-side analysts provide investment recommendations to portfolio managers and clients based on their research and analysis.

Assessing Risk and Return Profiles of Potential Investments: They evaluate the risk and return profiles of potential investments to make informed decisions.

Contributing to Investment Strategy and Asset Allocation Decisions: Buy-side analysts play a role in shaping investment strategies and asset allocation decisions based on their analysis.

Monitoring and Evaluating the Performance of Investments in the Portfolio: They continuously monitor and evaluate the performance of investments in the portfolio to ensure alignment with investment goals.

Responsibilities of sell side analysts

Sell-side analysts play a crucial role in the financial industry by providing investment research and recommendations to their clients. Their key responsibilities include:

Conducting Research and Analysis on Companies and Industries to Provide Investment Recommendations: Sell-side analysts perform in-depth research on companies and industries to identify investment opportunities and provide recommendations to their clients.

Writing Research Reports and Notes to Communicate Findings and Recommendations to Clients: They produce detailed research reports and notes to communicate their analysis, findings, and investment recommendations to their clients.

Building Financial Models and Forecasting Future Performance of Companies: Sell-side analysts create financial models to project the future performance and valuation of companies.

Monitoring Market Trends and News to Identify Investment Opportunities: They closely monitor market trends, news, and developments to identify potential investment opportunities for their clients.

Assisting in the Execution of Transactions, Such as Initial Public Offerings and Mergers and Acquisitions: Sell-side analysts may be involved in supporting the execution of various financial transactions, such as IPOs and M&A deals.

Developing Relationships with Institutional Investors and Other Clients: Sell-side analysts work to build and maintain relationships with institutional investors and other clients to understand their investment needs and preferences.

Attending Industry Conferences and Events to Gather Information and Insights: They actively participate in industry conferences and events to gather information, insights, and networking opportunities.

Working Closely with Sales Teams to Communicate Investment Recommendations to Clients: Sell-side analysts collaborate with sales teams to effectively communicate their investment recommendations and ideas to clients.

Providing Market Commentary and Updates to Clients: They provide regular market commentary, updates, and analysis to keep their clients informed about the latest developments in the financial markets.

Assessing Risk and Return Profiles of Potential Investments: Sell-side analysts evaluate the risk and return profiles of potential investments to make informed recommendations to their clients.

Skills and qualifications required for buy side and Sell side analysts

To excel in the field of finance, particularly as a financial analyst, a combination of skills and qualities is essential. Here are the key points to consider:

Strong Analytical and Quantitative Skills: Financial analysts must possess strong analytical abilities to interpret data, identify trends, and make informed decisions based on quantitative analysis.

Knowledge of Financial Markets and Investment Strategies: Understanding financial markets, investment vehicles, and various strategies is crucial for effective decision-making and analysis in the finance industry.

Ability to Interpret Financial Statements and Perform Financial Analysis: Proficiency in interpreting financial statements and conducting thorough financial analysis is fundamental for assessing the financial health and performance of companies.

Proficiency in Financial Modeling and Forecasting: Financial analysts should be adept at building financial models and forecasting future performance to support investment decisions and strategic planning.

Excellent Research and Information Gathering Skills: Strong research skills are essential for gathering relevant data, conducting market analysis, and staying informed about industry trends and developments.

Effective Communication and Presentation Skills: Being able to communicate complex financial information clearly and concisely is crucial for presenting findings, recommendations, and reports to stakeholders.

Ability to Work Under Pressure and Meet Deadlines: Financial analysts often work in fast-paced environments where meeting deadlines and managing multiple tasks simultaneously is essential for success.

Attention to Detail and Accuracy: Precision and attention to detail are critical to ensure the accuracy of financial analysis, reports, and recommendations in the finance industry.

Ability to Work Independently and in a Team: Financial analysts should be capable of working independently on projects as well as collaboratively within a team to achieve common goals and deliver results.

Continuous Learning and Staying Updated with Industry Trends and Developments: Given the dynamic nature of the financial markets, ongoing learning, and staying abreast of industry trends are vital for adapting to changes and making informed decisions.

Pros and Cons of Being a Buy-Side Analyst

Potential for higher compensation: Buy-side analysts can earn higher compensation due to the potential for higher returns on investments and the value they bring to their clients.

Greater autonomy in investment decision-making: Buy-side analysts have more autonomy in making investment decisions, as they are directly responsible for managing client portfolios and making investment recommendations.

Opportunities to work with sophisticated investors and industry experts: Buy-side analysts have the opportunity to work with sophisticated investors and industry experts, which can provide valuable insights and learning experiences.

Exposure to a wide range of investment strategies and asset classes: Buy-side analysts are exposed to a wide range of investment strategies and asset classes, which can broaden their knowledge and skills.

Long-term focus and ability to build long-lasting relationships with companies: Buy-side analysts have a long-term focus and can build long-lasting relationships with companies, which can lead to more stable and predictable investment opportunities 1 3 .

Pressure to consistently deliver strong investment performance: Buy-side analysts face pressure to consistently deliver strong investment performance, which can be demanding and stressful.

Limited access to sell-side research and market insights: Buy-side analysts may have limited access to sell-side research and market insights, which can limit their ability to make informed investment decisions.

Reliance on own research and analysis: Buy-side analysts rely heavily on their own research and analysis, which can be time-consuming and may not always provide the most accurate information.

Potential for higher risk and volatility in investment outcomes: Buy-side analysts are exposed to higher risk and volatility in investment outcomes, as they are directly responsible for managing client portfolios and making investment decisions.

Limited career opportunities compared to sell-side analysts: Buy-side analysts may have limited career opportunities compared to sell-side analysts, as they are often part of a larger investment firm or institution.

Pros and Cons of Being a Sell-Side Analyst

Exposure to a wide range of companies and industries: Sell-side analysts have the opportunity to cover various companies and industries, gaining a broad perspective on the market.

Access to sell-side research and market insights: They have access to valuable research and market insights that can aid in making informed investment decisions.

Opportunities for career advancement and networking: Sell-side analysts can advance their careers within the brokerage firms they work for and build strong professional networks.

Exposure to deal-making and transaction execution: They are involved in deal-making processes and transaction executions, providing hands-on experience in these areas.

Potential for higher compensation through bonuses and commissions: Sell-side analysts have the potential to earn higher compensation through bonuses and commissions based on their performance.

Pressure to meet sales targets and generate revenue: Sell-side analysts face pressure to meet sales targets and generate revenue for their firms, which can be demanding.

Limited autonomy in investment decision-making: They may have limited autonomy in making investment decisions due to the focus on meeting clients' needs and expectations.

Short-term focus and reliance on market trends: Sell-side analysts often have a short-term focus and rely heavily on market trends, which can impact the quality of their analysis.

Potential conflicts of interest with clients: There is a risk of conflicts of interest with clients as sell-side analysts work for brokerage firms that may have vested interests in certain investments.

Limited access to company management and information: Sell-side analysts may have restricted access to company management and information, which can hinder the depth of their research and analysis.

Career Paths and Opportunities for Buy-Side Analysts

Portfolio manager.

Buy-side analysts can progress to become portfolio managers, who are responsible for managing investment portfolios and making decisions on asset allocation and security selection to meet the investment objectives of their clients.

Research Analyst

Buy-side analysts can continue to specialize as research analysts, conducting in-depth analysis on companies, industries, and market trends to identify investment opportunities.

Risk Manager

Buy-side analysts can transition into risk management roles, where they are responsible for analyzing and mitigating the risks associated with investment portfolios.

Investment Strategist

Buy-side analysts can become investment strategists, who develop and communicate the firm's overall investment strategy and market outlook to clients.

Asset Allocator

Buy-side analysts can take on the role of asset allocators, who are responsible for determining the optimal mix of asset classes within investment portfolios.

Fund Manager

Buy-side analysts can progress to become fund managers, who are responsible for managing and overseeing the performance of investment funds.

Quantitative Analyst

Buy-side analysts with strong quantitative skills can specialize as quantitative analysts, developing and implementing mathematical models for investment decision-making.

Financial Planner

Buy-side analysts can transition into financial planning roles, where they provide comprehensive financial advice and solutions to individual clients.

Hedge Fund Manager

Buy-side analysts can move into hedge fund management, where they are responsible for managing alternative investment strategies and generating returns for investors.

Private Equity Analyst

Buy-side analysts can specialize in private equity, conducting due diligence and analysis on potential investments in private companies.

Career paths and opportunities for sell side analysts

Equity research analysts are responsible for analyzing publicly-traded equities to publish reports containing company and industry-specific insights to support a formal recommendation. They closely analyze small groups of stocks to provide investment ideas and recommendations to the firm's salesforce and traders, as well as to institutional investors and the general investing public.

Investment banking analysts provide advisory services to clients on mergers and acquisitions (M&A) and initial public offerings (IPOs). They advise corporations, governments, or other entities on how to raise capital, as well as on acquisitions, mergers, and sales of businesses. Investment banking positions include consultants, banking analysts, capital market analysts, research associates, and trading specialists, each requiring its own education and skills background.

Sales and trading roles involve pitching clients for selling or buying stocks, bonds, and derivatives. Salespeople pitch clients, while traders execute the deals to help clients buy or sell securities. Sales and trading jobs are intensely involved in making the stock market move every day. Sales and trading groups in financial markets offer long-term equity capital for investors in public markets such as venture capital funds, mutual funds, exchange-traded funds (ETFs), and other banks at a low price.

Corporate finance roles involve a different skill set compared to investment banking. Investment bankers advise corporations, governments, or other entities on how to raise capital, as well as on acquisitions, mergers, and sales of businesses. On the other hand, corporate finance roles focus on financial planning and analysis, treasury, and capital budgeting, among other responsibilities.

Mergers and acquisitions (M&A) analysts advise corporations, governments, or other entities on how to raise capital, as well as on acquisitions, mergers, and sales of businesses. This role involves the consolidation of companies or their major assets through financial transactions between companies.

Asset management roles involve managing clients' investments and providing them with traditional and alternative investment products individually or through a packaged product like a mutual fund. Asset managers aim to generate returns for their clients and may specialize in different asset classes, such as equities, fixed income, real estate, or commodities.

Venture capital roles involve investing in early-stage companies with high growth potential in exchange for an equity stake. Venture capitalists provide capital to startups with long-term growth potential, aiming for substantial returns on their investments.

Private equity roles involve investing in and acquiring shares of private companies. Private equity firms raise funds from institutional investors and high-net-worth individuals to invest in private companies with the goal of improving their performance and ultimately selling them for a profit.

Risk management roles involve identifying, assessing, and prioritizing risks, and implementing coordinated and economical application of resources to minimize, monitor, and control the probability and impact of unfortunate events or to maximize the realization of opportunities.

Wealth management roles involve providing financial planning, investment management, and other financial services to high-net-worth individuals and families. Wealth managers help clients manage their wealth and achieve their financial goals through a comprehensive approach to managing their financial affairs.

Interview Question

Q1- Elaborate me the difference between sell side and buy side?

Q2- You are currently working on the sell-side then why do you want to join the buy-side?

Q3- What is the difference between buy-side and sell-side in equity research?

(DCF) Discounted Cash Flow Analysis

Core Concepts of Financial Modeling

Capital Expenditure: The Formula Breakdown

• X (Twitter)

The Equity Analyst

How (Sell-side) Equity Research Works

Yes, investment banks provide the back-end such as office space, payroll, distribution channel, etc., but analysts have 100% discretion on how to run their research team based on their vision.

The franchise nature of the profession explains why asking “which bank has the best equity research report” does not mean much, because the highest-ranked internet analyst (Brian Nowak, Morgan Stanley) and the highest-ranked large-cap biotech analyst (Umer Raffat, Evercore ISI) don't sit in the same firm.

You can WATCH this article:

How is the sausage made?

In this section, I am going to show you the whole process of equity research – from content creation to reporting dissemination. I will use the initiation reports (to be explained later) as an example, but the process is similar for all report notes.

Research Analyst / Team

The research teams are the sources of content. They produce the research reports and create the financial models based on management guidance, macro data, and historical financial data of the covered company.

Per FINRA regulation, analysts are not allowed to speak their views on stocks without first publishing reports that contain their views. Therefore, every time analysts join a new firm, they will “initiate” on the stocks they intend to cover (also known as “launching coverage”). The initiation reports are detailed reports that describe the business, competition, products, market size, investment thesis, etc.

Supervisory Analyst (SA)

After the reports and financial models are finished, they are sent to Supervisory Analysts (SAs) for review. SAs are the biggest impediment to report dissemination. So they are disliked by equity research across the industry, but they are a staple feature of the profession.

For example, SAs will check to make sure reports do not solicit investment banking businesses (such as speculating on mergers or acquisitions not confirmed by the press) or do not contain provocative language (things get subjective quickly and that's when research teams frequently get into shouting matches over email with SAs).

Every single equity research report needs to be approved by an SA before it’s published and disseminated to clients.

Thanks for reading The Equity Analyst! Subscribe for free to receive new posts and support my work.

Equity Sales & Product Management

After the initiation notes are approved, the analyst will tell Product Management that she will go on the morning call to market the product.

The morning call is a daily meeting that occurs before the stock market opens. During the meeting, research analysts who are scheduled to appear will take turns pitching their high-impact research (such as initiation, deep dive, key stock upgrade / downgrades) to equity salespeople, so that the salespeople can promote their research to institutional clients. (For more routine research reports such as earnings notes, analysts don’t go on morning calls.)

During this process, two additional constituents are involved:

Product Management : They manage the morning call process. They: 1) Decide whom to let on the morning call (because every analyst thinks every research report of theirs is high impact); 2) Provide guidance on best practices for research reports based on client feedback; 3) Keep track of readership metrics; 4) Manage the firm’s annual institutional investor poll process, such as strategy to get more votes and move up the firm ranking.

Equity Sales : They are the distribution channel. They attend morning calls every day because that’s when they receive the products to sell to clients for the first time on that day (if sales know an analyst stock upgrade before the report is published, that's the same as having access to insider information).

Salespeople have their coverage of client accounts (eg. Hannah covers 5 industrial pods within Millennium Management and a mega single manager hedge fund; while Josh covers technology portfolio managers within Wellington Management, a long-only, and a few $200 million AUM long/short hedge funds in Boston).

Some of you might be wondering: If the notes are disseminated to clients’ inboxes directly, why the need for salespeople? The reason: Clients have access to 30+ sell-side firms who all send research reports to them every morning, you think they saw your analyst’s note?

So equity salespeople add value by amplifying the research reports by calling the clients personally: “Hey, Dick Toad put out this amazing deep dive on the flying car industry today. No one on (Wall) Street has done this depth of work in this space. You should check it out.” That nudge gets the client’s attention and drives readership if the salesperson and the analyst’s pitch are good.

Why does Equity Research exist?

A simple industry structure analysis explains well in my opinion: equity research is two-sided aggregation due to the highly fragmented nature of its two key constituents: investors and companies (issuers).

Investors : There are tens of thousands of equity investment funds out there. Smaller investment funds can leverage equity research to access the management of publicly traded companies of various sizes. Without equity research, these smaller funds would not receive management access because companies prioritize their internal investor relation resources on serving the largest shareholders. This is why research analysts host their own conferences where clients get to do 1-on-1 sessions (for a fee of course) to meet with the CEO of companies they are researching.

Companies : Yes, we all know about the S&P 500 companies, but there are many more companies with lower market capitalization who need investor attention. Equity research provides that reach for these companies.

Even S&P 500 constituents wouldn’t mind relying on the sell-side to reach a broader, fragmented group of investors who can be incremental buyers of their company’s stock. As mentioned before, there is only that much an in-house investor relation department can achieve.

What value does equity research really add?

From the vantage of an outsider (or even those in the industry), a lot of things do not make sense. I think incentives are what made equity research how it is.

Sell-side research is not in the business of generating alpha. Some do differentiate by stock picks. But most add value via other routes that are less stressful than being right on stock picks.

There are analysts within sectors that even the best buy siders respect what they say, but they are the outlier, not the norm.

Some of equity research's value add:

Saves time for buy-siders : financial models, understanding the sector, understanding the history of a company, understanding a business with complex product or business model

Corporate access : analyst conferences, non-deal roadshows, etc.

Promote the company (the equity issuer) : even most outsiders understand the role research, especially senior analysts, plays in winning IPO deals for her investment bank, so there is no misconception here.

What Do Equity Salespeople Exist?

When I started in equity research, I wondered why salespeople existed on the trading floor. All they do is on the phone with clients every day, wine and dine with them, and schedule calls. What’s their value add? I argue equity sales is an absolutely essential feature of equity research.

Equity salespeople liaise between sell-side research analysts of their firm and external public equity investor clients. Equity salespeople add value in the following ways:

Amplifying : An investment firm with a decent trading budget gets emails from 30+ equity research firms every morning. Let’s face it – do you read all the free newsletters you get this morning? The buy-siders are also not reading most of the emails. That’s where equity sales come in: A salesperson will call a portfolio manager client to deliver a 30-second idea pitch in hopes of generating readership and arranging a call (for a fee) with the analyst who published the idea. Equity research is definitely not an “if you write it, they will read” profession.

Relationship cultivation : While some smaller hedge funds will never scale, some will become the next large fund. Sell-side analysts just don’t have the bandwidth to build intimate relationships with all the hedge funds out there. Salespeople fill that void by cultivating the relationship from the day one fund launch. Shocking fact: small funds want their existence to be acknowledged too. To whom do you think that small fund will allocate trades to when it scales?

Product-market fit : Investment management firms have widely divergent beliefs on how to make money in the stock market. This makes it hard to have a one-size-fits-all research product. Sell-side analysts are only motivated by a growing audience, but every client wants different things. Salespeople must exist to repackage research to appeal to different clients. A good salesperson takes good notes on their client’s specific needs: For example, Susan, PM at a deep value fund, likes mining and energy names and has a 3 to 9-month time horizon. Nick, the PM at a hyper-growth fund, likes disruptors in the consumer sector with hard catalysts. If a sell-side analyst pitched an idea that fits the filter, the salesperson will funnel the idea selectively to her clients, thus improving product-market fit and amplifying the effectiveness of the idea. As the salesperson interacts more with the same client, she only better understands the client’s needs, which enhances client relationships and should drive incremental trading volume and commission for her firm.

So equity salespeople are essential in the equity research value chain.

What is “II”?

If you have remotely contemplated pursuing investment research, you probably have heard of II rankings. II stands for  Institutional Investor , a magazine company that annually surveys public equity investors about their favorite Wall Street research analysts. The votes are aggregated and weighed by trading commissions to rank top analysts by sector.

Let us set the stage by reintroducing the players:

Buy-side:  Public equity investors – mutual funds, hedge funds, family offices, etc.

Sell-side:  Investment bank that houses the equity research function

Companies:  Businesses whose stocks are publicly traded

The most important thing to know:   Being II ranked does not mean an analyst is a good stock picker.  Hell, the sell-side equity research profession was not built under the premise of making money for clients.

However, being II-ranked does mean a research analyst is useful to the buy-side in some way, which includes:

Company management access

Channel checks

Industry knowledge

Fun client events

Knowledge of market flow

Making money (you should not be surprised how few choose this route)

How does II ranking matter to the constituents below?

Firms that pay trading commissions have a higher weight in a sell-side analyst’s II rating as II is a commission-weighted voting process.

The high trading commission generally means an investment firm buys and sells stocks very frequently, so sell-side analysts who want a ranking should prioritize adding value to the shorter-term funds that trade a lot (generally pod shops and single-manager hedge funds trade more frequently than mutual funds, long only).

Buy-side portfolio managers and analysts call a sell-side analyst that adds the most value to their investing process. Because II ranking is commission-weighed, being II ranked directionally is a reflection of likeability by hedge funds rather than by mutual funds.

Companies / Issuers

The companies care about the visibility of their stocks. Every company wants research coverage from II-ranked sell-side analysts because these analysts have higher visibility in front of equity investors who can be incremental buyers of the company’s stock.

Stock price going up (because of incremental buyers) is good for the company’s investors and the company management. Because of the prospect of better visibility, companies are more inclined to bring investment banking services to that II-ranked investment bank as the issuer will get a better price for secondary equity issuance.

Obviously, being II-ranked as a firm is good for branding, given the issuers value the benefit of going with an II-ranked investment bank for services. For the boutique research firms without investment banking services who rely on selling report subscriptions, they don’t care about II as much.

So, the research people at firms with investment banking services care about getting votes because their job security and bonus depend on it

That is all you need to know about II. 

Does working for an II-ranked sell-side analyst matter? You will hate this answer – it depends on your goal:

Become a sell-side senior analyst:  You should work for an II-ranked analyst to learn how to get ranked.

Work at a long-term investment firm:  It does not matter because you want to work for a sell-side analyst who has deep industry knowledge and can pick long-term winners, but their value-add doesn’t mean getting votes from shorter-term trading clients, who have a bigger say in II votings. 

Work at a short-term trading firm:  It matters because you learn how to add value in the areas of calling quarters accurately and develop good contacts for channel checks. You will also get access to clients you want to work for because they respect your analyst.

Work at a covered company:  It could matter if your analyst has strong access to company C-suites and can place you in an unpublicized, high-profile corporate role. She can just make a phone call for you; provided you have built enough goodwill and the relationship is good.

Thanks for reading. I will talk to you next time.

If you want to reach 3,000+ equity investors, contact me 👇

Advertise with The Equity Analyst

Check out my other published articles and resources:

Resources for you

Fund Profiles

Book Reviews

📇 Connect with me: Instagram | Twitter | YouTube | LinkedIn

If you enjoyed this article, please subscribe and share it with your friends/colleagues. Sharing is what helps us grow! Thank you.

Ready for more?

Penn Libraries FAQ

• Penn Libraries

Q. How do I find analyst reports (investment bank research)?

• Exhibitions
• Fisher Fine Arts
• General Information
• Phased Library Services
• Rare Books & Special Collections
• Systematic Reviews
• University Archives & Records Center

Answered By: Lippincott Library Last Updated: Apr 21, 2024     Views: 172186

Use LSEG Workspace (formerly Refinitiv).

• To find analyst reports (also known as sell-side, broker, or equity research reports) for a specific company, search for that firm's ticker symbol or name in the top search box. Then, on the News & Research  menu, click on Company Research . Use filters near the top of the page to refine your search. 
• To screen for analyst reports based on a set of criteria, type  ADVRES in the search bar and select the Research Advanced Search app, or click on  Research in the main menu. then, click on Advanced Research . You can filter for reports by industry, geography, contributor, keywords, and more.

Note: LSEG Workspace has a  150-page daily limit for viewing and downloading research content. This limit is in lieu of retail prices listed on reports and resets at 12:00 AM Eastern Time daily.

Bloomberg (see access details ) contains some analyst reports.

• Type your company's ticker symbol, then hit the yellow EQUITY key, then type DSCO and hit the green GO key.
• To find reports by industry or keyword, type RES and hit the green GO key.

Morningstar equity research reports and analyst cash flow models can be found in PitchBook .

Hoovers contains some analyst reports as well.

• Type in a company name and select the company you want.
• Scroll down the screen; if available, analyst reports appear under Advanced on the left side.
• Share on Facebook

Was this helpful? Yes 0 No 0

We've detected unusual activity from your computer network

To continue, please click the box below to let us know you're not a robot.

Why did this happen?

Please make sure your browser supports JavaScript and cookies and that you are not blocking them from loading. For more information you can review our Terms of Service and Cookie Policy .

For inquiries related to this message please contact our support team and provide the reference ID below.

A Student’s Guide to Writing A Buy-Side Equity Research Report

• via Research , Resources

Marina Chang

A career in finance can take on many different forms — from investment banking to equity research. Equity researchers conduct detailed analyses in order to offer well-supported investment recommendations. Their analyses are then compiled into what is referred to as an equity research report. These reports differ on the sell-side and buy-side, but they do have some overlaps. This guide will break down the key components and formats to help you successfully craft your own equity research report.

What is an equity research report? What is the purpose of a research report?

An equity research report is a document prepared by an analyst that gives an overview of a business, including the industry it operates in, its management team, its financial performance, risks, and its target price. The purpose of a research report is to provide a recommendation on whether investors should buy, hold, or sell shares of a public company.

What’s the difference between a buy-side and sell-side equity research report?

Sell-side reports are the most common type of equity research report. They are typically produced by investment banks for their clients to help guide investment decisions. Sell-side analysts issue the often-heard recommendations of “buy,” “hold,” “neutral,” or “sell” to help clients with their investment decisions. This is favorable for the brokerage firm as each time a client decides to trade the brokerage firm gets a commission on the transaction.

Buy-side reports are internal reports, produced for the bank itself, and are guided by differing perspectives and motivations. Buy-side analysts determine how promising an investment seems and how well it fits with the fund’s investment strategy. These recommendations are made exclusively for the benefit of the fund that employs them and are not available to anyone outside the fund.

What information should be included within your equity research report?

• Recommendation  – Typically to buy, sell, or hold shares in the company. This section also usually includes a target price (i.e., $47.00 in the next 12 months).
• Company Update  – New releases, quarterly or annual results, major contracts, management changes, or any other recent or important information about the company.
• Investment Thesis  – A summary of why the analyst believes the stock will over or underperform and what will cause it to reach the share price target included in the recommendation. This is probably the most interesting part of the report.
• Financial Information & Valuation  – A forecast of the company’s income statement, balance sheet, cash flow, and valuation. This section is often an output from a financial model built in Excel.
• Risk & Disclaimers  – An overview of the risks associated with investing in the stock. This is usually a laundry list of all conceivable risks, thus making it feel like a legal disclaimer. The reports also have extensive disclaimers in addition to the risk section.

What information is needed for the industry pages?

• Competitive Rivalry  – This looks at the number and strength of competitors. How many rivals does the company have? Who are they, and how does the quality of their products and services compare?
• Supplier Power  – This is determined by how easy it is for suppliers to increase their prices. How many potential suppliers does the company have? How unique is the product or service that it provides, and how expensive would it be to switch from one supplier to another?
• Buyer Power  – Here, you ask how easy it is for buyers to drive prices down. How many buyers are there, and how big are their orders? How much would it cost them to switch from the company’s products and services to those of a rival? Are buyers strong enough to dictate terms?
• Threat of Substitution  – This refers to the likelihood of customers finding a different way to do what the company offers.
• Threat of New Entry  – The company’s position can be affected by how easy it is for a new company to enter the industry. How much would it cost, and how tightly is the industry regulated?

How to create and forecast a financial model.

• Gather the company’s most recent 10-K and 10-Q SEC filings.
• For all three financial statements, copy and paste the line items that can be forecasted.
• Make income statement projections based on margins as a percentage of revenue.
• Create a depreciation schedule to account for the reduction of PP&E and intangible assets over time.
• Calculate working capital assumptions.
• Forecast current assets and liabilities on the balance sheet.
• Adjust net change in cash and cash equivalents (CCE) with the cash flow statement.
• Reconcile the cash flow statement with the balance sheet.
• Compute the dividend payout ratio if the company offers a dividend.
• Create the shares repurchase schedule if the company has a share buyback program.
• Construct the debt schedule.
• Calculate interest income and interest expense from the debt schedule.
• Run multiple scenarios – Wall Street Case, Bear Case, Bull Case.
• Sanity check your assumptions.

How many pages should your equity research report contain?

An equity research report should not be more than 10 to 15 pages long. Aim to be both concise and cohesive.

What kind of disclaimer should be included?

It is important for the report to have certain disclaimers to show that the analyst writing the report isn’t biased. Some typical disclaimers are as follows: 

• Every ER report entirely reflects the views and personal opinions of the analyst as on the date of publication.
• The equity research analyst does not have an interest in the shares of the company.
• Compensation of the analyst is not linked directly to any specific research recommendations contained in the report.
• Financial analysts or equity research analysts working in brokerage firms or sell-side analysts write equity research reports.

With all these points in mind, you are now ready to write your own equity research report. Select a public company, use this guide as a reference, and see what results from your analysis. Congratulations in advance on completing your research report!

Romero Mentoring’s Analyst Prep Program

In just 15-weeks, you can become a world-class finance professional. The Romero Mentoring Analyst Prep Program is an all-inclusive internship, mentorship, and training experience like no other. Learn the in-depth principles of finance and apply what you learn through an extensive internship led by a finance professional with over 12 years of experience.  Learn more here.

The  Analyst Prep Program  teaches the technical and practical skills that investment banks, hedge funds, and private equity & consulting firms look for in a candidate. Students begin with little to no technical skills and develop into fully prepared professionals who can perform as first-year analysts from day one.

About Romero Mentoring

Since 2016, Romero Mentoring investment banking training programs have been delivering career mentoring to job seekers, professionals, and college students pursuing careers in finance. We’ve helped over 400 students start their careers on Wall Street through our Analyst Prep and Associate Investment Banking Training Programs. Our graduates work at top-bulge bracket banks and consulting firms, including Goldman Sachs, JP Morgan, McKinsey, and many more.

References:

• https://www.financewalk.com/equity-research-report/
• https://corporatefinanceinstitute.com/resources/knowledge/valuation/equity-research-report/#:~:text=What%20is%20an%20Equity%20Research,distributes%20that%20research%20to%20clients.
• https://quickbooks.intuit.com/r/marketing/market-research-tips-how-to-conduct-an-industry-analysis/

About the Author

Marina Chang is a business student at New York University pursuing a double concentration in Finance and Data Science. She is currently an Investment Research Intern at Romero Capital. Marina is an Analyst at NYU's Smart Woman Securities, where she worked with a team of 5 to compete in a stock pitch. She is also a Staff Consultant at 180 Degrees Consulting. The organization provides affordable advising services for non-profits and social enterprises. Marina was a mentee of the Analyst Prep Program.

Recommendations For You

Securing A Financial Analyst Role & The Recruiting Process

The Cost of a College Education

Maximizing Your Networking Potential: Navigating the Finance and Investment Banking Industry

Free Career Consultation

Speak to a professional veteran with 15 years of experience, fill out the form below to request your appointment. learn how we can help you maximize your potential..

What is your highest level of education? High school student College/university student Master’s program student Working professional Other

What is your current annual income? $0-25,000 $26,000-50,000 $51,000-75,000 $76,000-100,000 $1000,000+

Upload Resume

By submitting this form, you agree to receive emails from or on behalf of Romero Mentoring. You understand that such emails may be sent using automated technology. You may opt out at any time. Please view our Privacy Policy or Contact Us for more details.

Start my free trial

Please fill out the form below and an AlphaSense team member will be in touch within 20 minutes to help set up your trial.

Produce in-depth research, faster

Access key information in one place with the leading financial research and AI search platform.

Stop wasting time on monotonous search

Stop wasting time manually combing through individual transcripts and financials for answers that may not exist. Let AI extract key stats, themes, and trends so you can focus on high-value analysis.

Landscape your industry in seconds

Streamline the research process with a one-stop shop for all your premium sources, notes, and analysis.

Never miss a thing

Proactively identify key drivers of business momentum with real-time alerts for news and company announcements.

Know your companies, inside and out

Leverage intelligent search to effortlessly see how a company discusses a topic across all history in a single view. Smart Synonyms™ understand variations in business language to ensure you never miss out on relevant mentions.

Work smarter during earnings season

Save time and cover more companies during earnings season with Smart Summaries. Our genAI feature automatically generates earnings call briefings that instantly recap company performance and outlook, giving you more time to connect with clients.

Jumpstart financial analysis and models

Spend less time manually spreading financials or toggling between restated and original financials. Table Explorer gives you the ability to stitch together historical statements, automatically calculate key metrics, and export directly to Excel.

“I prefer to use AlphaSense to access all the documents I need because it is all in one spot. When a client asks me a question, I can instantly pull up what a company has said.”

“When I have a hard time drawing major investment conclusions, the expert transcript library comes with extremely interesting data points. I take these into consideration when going to management one on ones.”

“Before AlphaSense I spent hours going through individual transcripts looking for thematic trends. AlphaSense frees me up to spend more time updating models, writing reports and speaking to clients.”

“I continue to use AlphaSense most for initiations. Going back and forth between Ks and Qs is exhausting. AlphaSense keeps that all in one place to quick compare financial performance.”

“Previously I would use the edgar tool and basically have 20 tabs open and I would manually spread that data. With AlphaSense, I can export all data as one time period as column to jumpstart my model.”

Renaissance Macro Analyst Streamlines Workflow with AlphaSense

Introducing Smart Summaries: Generative AI for Earnings Analysis

The Future of Generative AI: An Analysis of the Leaders, Opportunities, and Threats

Accelerate your research process.

Elevate your research with AI search technology that surfaces insights with instant and centralized access to premium company sources, industry reports, and proprietary expert insights for any company and industry. Start a free trial with AlphaSense today.

• Recently Active
• Top Discussions
• Best Content

By Industry

• Investment Banking
• Private Equity
• Hedge Funds
• Real Estate
• Venture Capital
• Asset Management
• Equity Research
• Investing, Markets Forum
• Business School
• Fashion Advice
• Equity Research Forum ER

Where to Find sell side Research Report

• Share on Facebook
• Share on Twitter
• Share on LinkedIn
• Share via Email

I work for a sell side research firm, does anyone know where one could find good sell side reports for free? (equity, HY , macro, commodities, anything that relates to investment analysis on certain security)

Some online brokerages will provide reports. Charles Schwab offers CS reports sometimes.

Bloomberg terminal - if you go to the page for the equity there will be a tab with a lot of research/coverage

Acquiring Research/Sell-Side Research ( Originally Posted: 05/31/2015 )

Hello WSO ,

I have finished a complete financial statement model and analysis of both a the REIT sector and a company within but would now like to read some research on the company in question. Is there anyway for someone to get sell-side research or any resources to get research/info on specific companies? I know it's a lot to ask.

Umm, Seeking Alpha? :) Unless you have a Bloomberg terminal or FactSet/Reuters subscription through your business school library, you're out of luck!

Where I can buy sell-side analysts' reports? ( Originally Posted: 11/21/2015 )

I want to purchase sell-side analyst reports of various investment banks ( Goldman Sachs , J.P.Morgan, Citi etc .). Does anyone know where I can buy them (except Thomson Reuters or Bloomberg )?

If you have friends who work in finance it's easy enough to get someone to send you some.

Try to do what above poster said....do you know what these would cost if you were to buy them on your own??

Thanks for your reply. It will be paid by my company. So it is okay even if it is expensive. Do you know where I can buy them?

Nulla sequi odit et. Eos amet minus eos amet voluptas eum enim.

Exercitationem error sunt vel labore sed incidunt. Adipisci officiis blanditiis fuga qui autem a dignissimos. Ut sunt quos et non reiciendis fugit quod.

Quia odit doloremque rerum odio. Maiores porro laboriosam ut aut. Illo in neque cumque id at et. Officiis molestiae velit necessitatibus quis iste labore quis. Sit eligendi qui quia fugit.

See All Comments - 100% Free

WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)

or Unlock with your social account...

Want to Vote on this Content?! No WSO Credits?

Already a member? Login

Trending Content

Career Resources

• Financial Modeling Resources
• Excel Resources
• Download Templates Library
• Salaries by Industry
• Investment Banking Interview Prep
• Private Equity Interview Prep
• Hedge Fund Interview Prep
• Consulting Case Interview Prep
• Resume Reviews by Professionals
• Mock Interviews with Pros
• WSO Company Database

WSO Virtual Bootcamps

• Jun 01 Private Equity Interview Bootcamp 10:00AM EDT
• Jun 08 Financial Modeling & Valuation Bootcamp Jun 08 - 09 10:00AM EDT
• Jun 22 Investment Banking Interview Bootcamp 10:00AM EDT
• Jun 29 Foundations Bootcamp 10:00AM EDT
• Jul 13 Real Estate Modeling Bootcamp 10:00AM EDT

Career Advancement Opportunities

May 2024 Investment Banking

Overall Employee Satisfaction

Professional Growth Opportunities

Total Avg Compensation

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

• Silver Banana
• Banana Points

“... I believe it was the single biggest reason why I ended up with an offer...”

Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.

or Want to Sign up with your social account?

AdExplainer: The Rise Of Sell-Side Curation

Audience curation is a manifestation of what the online ad industry has long been calling for: closer collaboration between partners that isn’t built on unreliable third-party signals.

To curate custom ad inventory, buyers have started working more closely with the sell side .

Publishers have strong insights into user browsing behavior that advertisers can use for first-party audience matching.

But the end of third-party cookies isn’t the only motivator driving the trend toward sell-side curation.

Working more closely with sell-side partners gives brands more transparency into audiences and supply.

But sell-side curation also enhances a publisher’s own contextual targeting capabilities, which is becoming more important as data privacy pushes campaign targeting away from an overreliance on user behavior and toward content-based signals.

Curation market evolution

Deal curation has always been part of programmatic advertising. It involves packaging publisher inventory into a private marketplace (PMP) and enhancing it with audience data.

But curation is evolving.

Typically, it’s been done through a DSP’s data marketplace, where advertisers pay to add third-party audience signals to their campaign targeting. DSPs have long used third-party cookie integrations to facilitate audience creation.

AdExchanger Daily

Get our editors’ roundup delivered to your inbox every weekday.

Daily Roundup

Amazon Ups Its ID And Ratings Game; Throw The Audiobook At Them

But SSPs began releasing their own specialized curation offerings with the launch of solutions like PubMatic Encore in 2020 and Xandr Curate in 2021. Other SSPs, including Magnite, Index Exchange and Nexxen, have also hopped on the trend.

Having SSPs in the mix has helped curation grow to a $1 billion industry over the past five years, according to Drew Stein, CEO of Audigent, a DMP that has rebranded as a curation platform. The curation market could grow to $5 billion over the next two to three years, he added.

SSPs are trying to corner the curation market because they’re less reliant than DSPs on third-party cookies. “The old way of having a deterministic identifier that gets hosted in a matching table is going to lose fidelity,” Stein said.

Xandr’s success with Curate – which launched months before the company was acquired by Microsoft – is widely credited with kicking off the SSP curation trend.

Xandr, which operates both a DSP and an SSP, realized that signal loss presented an opportunity to shift its DSP’s curation features to the sell side, said Chris Cattie, Microsoft Advertising’s US lead for Curate sales.

By doing so, Xandr could serve enterprise data companies and retail media networks that wanted to have more control over deploying their first-party audience data programmatically without needing data integrations with various partners, Cattie said.

And the platform could also support “buyers that don’t want to buy open exchange,” he said.

Publisher benefits

Although retailers were among the first publishers to embrace sell-side curation, other publishers have followed suit over the past few years, albeit belatedly.

Eventually, however, larger publishers caught on because their audiences are most in demand, and now, middle and long-tail publishers are also looking to curation as a way to boost their value in the marketplace.

Matching ID graphs between advertisers, publishers and third-party brokers is more effective when it’s done on the sell side, Cattie said. “We’ve heard from clients that there’s a 25% to 40% lift in reach when audiences are applied on the sell side.”

Sell-side curation also addresses one of the main concerns buyers have about publisher first-party data: that no single publisher’s audience has enough scale on its own. By participating in curated marketplaces, however, publishers can offer off-site audience extension similar to retail media networks.

“We’re moving toward a world where most publishers will be deploying PMPs to give buyers that access point,” Cattie said.

Boosting contextual

Sell-side curation also helps put a new shine on tried-and-true contextual targeting, which some advertisers consider a little too old school.

Combining high-quality contextually relevant publishers with first- or third-party audience data at scale makes the inventory more valuable to buyers, said Scott Ensign, chief strategy officer at agency Butler/Till.

“That’s where we start to see the magic happen with curation,” he said.

As a solution, Butler/Till works with its sell-side curation partners to include inventory from other publishers that appeals to the same audience but at a lower cost. Articles and retailer pages about clothing that helps hide psoriasis flare-ups, for instance, could complement the WebMD inventory.

CTV deal curation

Whenever off-site audience extension comes up, though, so does the question of transparency.

The sell-side approach to curation gives ad agencies more transparency into the inventory they’re buying.

“Having a direct relationship with a curation partner means we’re selecting those things together,” Ensign said, “and we understand what we’re going after from the beginning.”

Although DSPs sometimes offer placement-level transparency after impressions are delivered, buyers “wouldn’t have as much input into creating that marketplace,” he added. Instead, they’d mostly have to select from a DSP’s standard off-the-shelf curated audiences.

Nexxen, for example, which also operates both a DSP and an SSP, collects content metadata from publishers to handpick inventory for multi-publisher deals on the SSP side, said Ally Appelbaum, VP of enterprise supply partnerships.

Placement-level transparency is especially sought after in the CTV market. But those publishers are hesitant to share that information with advertisers due to limitations in carriage agreements with content partners or to reserve such data for direct deals, Appelbaum said.

But sell-side curation creates a better balance between advertiser and publisher priorities.

“Some publishers are comfortable passing everything, some only pass genre and rating or channel and network,” Appelbaum said. “But even if we’re not quite at the show level, we can get closer to meeting the advertiser’s needs.”

More granular targeting is especially helpful for certain advertisers, like alcohol brands, that have strict requirements for where their ads can run, Appelbaum said. But it’s also useful for publishers that might want to ensure alcohol ads only run within certain content or at certain times.

But there’s another compelling reason CTV publishers are starting to offer more placement-level granularity: revenue. Publishers can charge a higher CPM for curated deals.

Curating your problems away

However, higher prices also come with a promise of higher quality.

An SSP wants “to be able to say to buyers, ‘I have high-quality supply and can help you address the issues getting headlines,’” said Ensign, pointing to the ANA’s programmatic transparency report last year which found that advertisers waste around $13 billion on MFA sites annually.

Beyond the MFA scourge, advertisers working directly with SSPs on curation can also avoid bid duplication , which is when SSPs send multiple requests selling the same inventory on a publisher’s site, said Eli Heath, head of identity, global partnerships and product at Lotame, another former DMP that now offers curation services.

Plus, sell-side curation offers a way for publishers to activate their first-party data programmatically, which they’ve been told they need to do for years to improve their long-term monetization prospects.

Combining curation, context and audience “is a way to value the publisher side of the equation,” Ensign said.

“We need quality publishers in this ecosystem,” he said, “and we need for them to have a meaningful monetization path.”

Correction 5/21/24: The original article misquoted Audigent’s Drew Stein as saying curation has grown from a $1 billion market to $5 billion over the past five years. Stein clarified that the curation market has grown to $1 billion over the past five years, and it could grow to $5 billion within the next two to three years.

T-Commerce Vs. Shoppable TV

Related stories.

How Sell-Side Curation Is Reshaping The Post-Cookie Supply Chain

Working With Buyers Isn’t The Only Way For SSPs To Stand Out From Competitors

As The Open Web Wobbles, Index Exchange Is Betting On Curated Deals

2023: The Year SPO Went Mainstream

Scott’s Miracle-Gro Is Seeing Green With Retail Media

It’s lawn season – and you know what that means. Scott’s Miracle-Gro commercials, of course. Except this time, spots for Scott’s will be brought to you by The Home Depot’s retail media network.

Walled Garden Platforms Are Drowning Marketers In Self-Attributed Sales

Sales are way up; ROAS is through the roof across search, social and ecommerce. At least, that’s what the ad platforms say.

Shadier Than Forbes? Premium Publishers Are Partnering With Content Farms To Make A Quick Programmatic Buck

The practice involves monetizing resold subdomains jammed with recycled MFA articles produced by notorious content farms.

Adalytics Claims Colossus SSP Is Misdeclaring IDs In Its Bid Requests

Colossus SSP, a DEI-focused supply-side platform owned by Direct Digital Holdings (DDH), is the subject of Adalytics’ latest report released Friday. It’s a doozy.

The Trade Desk Reframes Its Open Internet Vision As ‘The Premium Internet’

The Trade Desk is focusing beyond the overall “open internet” and on what CEO Jeff Green calls the “premium internet.”

Google Search’s Core Updates Are Crushing Sites And Reshaping The Web

Google Search, the web’s largest traffic and revenue generator for two decades, is in the midst of sweeping overhauls that have already altered how users are funneled around the internet.

Curation’s shift to the sell side is giving DSPs less control over how advertisers curate audiences, which is creating new tensions in the programmatic ecosystem.

Don’t Be Distracted By Cookie Drama. Google’s Search Changes Are The Real Existential Threat

Even if the industry finds a way to replace the cookie, it won’t matter if publishers no longer have traffic to monetize.

Disney’s Upfront Spotlights ESPN And Hulu

During Disney’s upfront event on Tuesday, just hours after Amazon’s, the Mouse House couldn’t hold back on pitching its content and advertising prowess. Sports was a big highlight.

Netflix Is Launching Its Own Ad Tech

Remember back when Netflix insisted it would never run ads on its platform? Well, not only does it now have 40 million MAUs for its AVOD tier, it’s also launching an ad tech platform.

Ad-free. Influence-free. Powered by consumers.

The payment for your account couldn't be processed or you've canceled your account with us.

We don’t recognize that sign in. Your username maybe be your email address. Passwords are 6-20 characters with at least one number and letter.

We still don’t recognize that sign in. Retrieve your username. Reset your password.

Forgot your username or password ?

Don’t have an account?

• Account Settings
• My Benefits
• My Products
• Donate Donate

Save products you love, products you own and much more!

Other Membership Benefits:

Suggested Searches

• Become a Member

Car Ratings & Reviews

2024 Top Picks

Car Buying & Pricing

Which Car Brands Make the Best Vehicles?

Tires, Maintenance & Repair

Car Reliability Guide

Key Topics & News

Listen to the Talking Cars Podcast

Home & Garden

Bed & Bath

Top Picks From CR

Best Mattresses

Lawn & Garden

TOP PICKS FROM CR

Best Lawn Mowers and Tractors

Home Improvement

Home Improvement Essential

Best Wood Stains

Home Safety & Security

HOME SAFETY

Best DIY Home Security Systems

REPAIR OR REPLACE?

What to Do With a Broken Appliance

Small Appliances

Best Small Kitchen Appliances

Laundry & Cleaning

Best Washing Machines

Heating, Cooling & Air

Most Reliable Central Air-Conditioning Systems

Electronics

Home Entertainment

FIND YOUR NEW TV

Home Office

Cheapest Printers for Ink Costs

Smartphones & Wearables

BEST SMARTPHONES

Find the Right Phone for You

Digital Security & Privacy

MEMBER BENEFIT

CR Security Planner

Take Action

Used-Car Prices Are Falling, Especially Among EVs

Prices have dropped 10 percent over the past year, although high interest rates remain a challenge for buyers who finance

The volatile used-car market is calming, finally, after a tumultuous few years saw prices soar. However, interest rates are still high, and add to the expense faced by buyers who have to finance , because they’ll end up paying more over the life of the loan.

As of April, the average price of a used car was $28,550, down 10 percent compared with a year earlier, according to CoPilot, a car-shopping app that tracks new- and used-car values. The average interest rate on a used-car loan is close to 12 percent, which can add significantly to the amount of money a car costs you to buy.

You could wait for interest rates to improve before buying a car, but not everyone has that luxury. If you need to buy a used car now, our expert advice and market insights from industry insiders can help guide you to the ones that offer the best value.

In good times and bad, Consumer Reports members can search our Used Car Marketplace for vehicles for sale in their area, sorting by the factors that matter most. The listings include CR reliability and owner satisfaction ratings, and there’s a free Carfax report for most of the vehicles. Members can also access ratings and information on used vehicles going as far back as 20 years.

Our main advice for buyers in today’s market is to act quickly and negotiate from an informed perspective. That can make the difference between getting a fair deal and paying too much. Also, it has never been more important to make sure your credit is in good shape. Interest rates are up, but the most competitive rates are reserved for those with strong credit ratings.

Here are some other ways to make the best of the current used-car market.

Consider buying a new car. The average price of a new car is about $47,000—showing a decrease this past year and down from its peak in December 2022. According to a recent report from CarGurus, an online marketplace for new and used cars, lower prices, combined with slowing sales and building inventory, mean that dealers and manufacturers are more likely to offer incentives on new cars in the months ahead. That means further price breaks for consumers. Also, new car buyers with good credit can benefit from t he manufacturer-subsidized financing offered on some brand-new models.

If you have to borrow money to buy a car, keep in mind that the older the car, the more interest a lender will charge. And with new cars, there’s also the added benefit of a fresh factory warranty. Check dealer incentives in your area and see what’s being offered. Pat Ryan, CEO of CoPilot, says that some of the best used-car deals right now can be found among Chryslers and Kias.

Look at older models. Used-car prices have dropped 10 percent on average over the last year, but pricing on older cars has seen a sharper decline. Ryan says that prices on 4- to 7-year-old used cars are down 19 percent, and 8- to 13-year-old cars are down 18 percent.

However, if you decide to buy an older car, Consumer Reports recommends looking at models known for reliability. Vehicles more than 5 or 6 years old aren’t likely to still be covered by a factory warranty (although many EVs have 10-year warranties). You can purchase an extended warranty or service plan, but it’s usually better to save what you’d spend on those for future repairs. The downside is that if you have to finance the purchase, interest rates tend to be higher on loans for older cars.

Shop used EVs. Ryan says automakers built more EVs than consumers ended up wanting over the past few years, which has caused used EV prices to drop 17 percent over the last year (and 36 percent over the past two). The best deals, though, may be found among used Teslas, which are selling for 36 percent less than they were a year ago. Ryan says used Model S prices have fallen 56 percent to an average of $32,582, and used Model 3 prices have come down 48 percent to an average of $26,785.

Prearrange financing. Figure out your budget and get financing based on what you can afford to pay monthly and as a down payment. It’s always a good idea to get financing through your bank or credit union before going to a dealership to look at cars. That way you have a baseline against which you can compare the terms of dealer financing, which may or may not be as good a deal.

As always, getting financing secured for a private-party sale is a little more difficult. You’ll need to have the funds secured and ready to pay out so that you’re able to buy a car quickly if you find one that is reliable, is fuel-efficient, and meets your other needs.

Cast a wide net. Prices outside your area may be better. You can find a good variety of used models on websites like TrueCar.com, operated by a CR partner, and through Consumer Reports’ Used Car Marketplace . Expand your geographic search if you need to. Be cautious about searching too far from home. You want to be able to go see any car you’re considering buying and test-drive it before signing a sales or leasing contract. This is especially true for used cars. The market hasn’t completely settled down yet, so if the car you’re looking at seems like a good deal, someone else might scoop it up from underneath you if you have to travel too far to get to it.

Do your research. Whether buying new or used, consult Consumer Reports’ road tests and ratings , looking closely at reliability, owner satisfaction, and safety. Make a short list of contenders to test-drive, and have a good understanding of the various trim versions and features. Print out information on the models you’re interested in from CR.org and manufacturer websites to take along with you.

Buy something reliable. If you can’t find a newer used car within your price range (including financing), you may find yourself looking at older models that you wouldn’t otherwise have considered. CR recommends taking any used car to a reputable mechanic to have it inspected. (If the owner or dealer balks at this request, you may be better off looking elsewhere.) You can also consult CR’s predicted reliability scores to make sure you buy something that won’t give you problems later.

Be willing to compromise. If you have to buy an older car, some of the features you want—whether advanced safety and driver assistance features or connectivity—might not be available. Decide which are absolute must-haves, and be flexible on the rest. As always, you’re more likely to find deals among less sought-after models like small sedans and front-wheel-drive SUVs, while larger SUVs and pickups are likely to be more expensive and quicker to sell.

Don’t borrow too much. Put as much money into a down payment as you can afford. This is good advice in any economic climate. Maximizing your down payment will reduce the amount you have to pay in interest on the rest and minimize the chance that you’ll be left hanging as your aging car’s value sinks over the years, particularly with used-car prices still relatively high.

For example, if you have to borrow $15,000 for a used SUV that will be worth less than $10,000 in a year or two, you may end up “underwater,” or owing more than the car is worth, especially with the average interest rate on a used-car loan at nearly 12 percent. If you crash the car or if it’s stolen, you’ll still have to make payments. Cars are depreciating assets in the best of times, but they’re likely to depreciate much more quickly if prices fall further.

“Consumers realize that used cars are not the great deal they once were, particularly as higher interest rates can actually make them more expensive for those who have to finance them,” says Jake Fisher, senior director of CR’s Auto Test Center.

Used-car wholesale prices—the price a dealer pays—fell during much of 2023, but trended up again in August. But t hose decreases have been slower to materialize for consumers on used-car retail lots. The long and the short of it, says Alain Nana-Sinkam, founder of Remarkit, a firm that tracks automotive market trends, is that the prices you’re seeing used-car dealers charge now are based on the wholesale prices they paid for them, often a month or more before they appeared on the lot, when prices were higher. He also says that any price declines have been at the top end of the market—in the luxury segments—and that with budget cars still very much in demand, prices haven’t cooled down for buyers looking for deals on those models cars.

Pat Ryan at CoPilot says that because of higher interest rates, used cars are no more affordable now than they were at the peak of the price hikes. He adds that manufacturers’ focus on more expensive new models over the past year has further exacerbated used-car pricing.

"With used-car prices finally easing this summer, many consumers may be asking themselves, ‘Should I buy the dip?’” he says. “The short answer is no. So far, prices have only fallen to the levels they saw at the start of the year, but have yet to make up the very substantial gains they saw across the past three years of the pandemic.”

In other words, Ryan says, prices still have a long way to go before approaching “normal” levels again.

Benjamin Preston

Benjamin Preston has been a reporter with the Consumer Reports autos team since 2020, focusing on new and used car buying, auto insurance, car maintenance and repair, and electric bikes. He has covered cars since 2012 for the New York Times, Time, the BBC, the Guardian, Road & Track, Car and Driver, Jalopnik, and others. Outside CR, he maintains his own small fleet of old cars and serves as a volunteer firefighter, specializing in car crash response and vehicle extrication.

Sharing is Nice

We respect your privacy . All email addresses you provide will be used just for sending this story.

Trending in Buying a Car

Popular Cars to Avoid and What to Buy Instead

Leasing vs. Buying a New Car

10 Most Satisfying Cars and SUVs

Best Used SUVs, Sedans, and Small Cars