Analyst believes the stock should be sold or will underperform.
: Analyzes the distribution of ratings and whether they can predict profitability. stock buy sell ratings
: Historically, "buy" recommendations were overwhelmingly more common (reaching 74% in mid-2000) than "sell" ratings (only 2%), leading to questions about analyst objectivity. The Stock Selection and Performance of Buy-Side Analysts Analyst believes the stock should be sold or
Research highlights that the "meaning" of a rating often depends on how rare it is within an analyst's total portfolio: Rating Type General Interpretation Frequency Context Analyst believes the stock will outperform its sector. Very common; may be "plentiful" and thus less impactful. Hold Stock is worth keeping but not adding more capital to. The Stock Selection and Performance of Buy-Side Analysts
: On average, recommendations do not impose significant "abnormal returns" during the event window, suggesting markets are relatively efficient.
Here are several full research papers and detailed studies focusing on the effectiveness, distribution, and performance of stock "buy," "hold," and "sell" ratings. Key Research Papers on Stock Ratings