Analyst Ratings Explained
Professional opinions on whether a stock is worth buying.
Published by Wall Street Score. Editorial standards.
Published 2026-08-02 · Updated 2026-10-09
Simple answer
Analyst ratings are recommendations from Wall Street analysts, typically categorized as buy, hold, or sell, often with price targets.
Why this matters
Analyst consensus provides a view of market expectations and professional sentiment toward a stock.
Good signs
Upward estimate revisions describe changing forecasts, not verified improvement or a promise of price gains.
Warning signs
Downgrades describe an analyst's changed assessment; inspect the stated reasons, date and valuation assumptions.
Easy mistake to make
Blindly following analyst recommendations without understanding the underlying reasoning or potential conflicts of interest.
How Wall Street Score helps
WallStreetScore incorporates analyst data into its assessment where available.
Read the firm's rating definition
Buy, hold, outperform and other labels do not have identical meanings at every firm. Check the report's benchmark, horizon, risk assumptions and disclosure of potential conflicts. A recommendation may describe relative performance rather than an expected positive absolute return.
The SEC cautions against relying solely on recommendations. Use the original report and issuer filings to understand the argument instead of treating the label as a conclusion.
Calculate the target gap without turning it into a forecast
Hypothetical price targets of $80, $100 and $150 average $110. Against a $100 price, the average implies a 10% gap, but individual targets range from a 20% decline to a 50% gain. The average hides disagreement and does not assign probabilities to those outcomes.
Check how many analysts are included and when their reports were written. Do not mix targets for different share classes, currencies or split bases. A target gap is not an expected return and may exclude dividends.
Compare like-for-like earnings revisions
A move from estimated EPS of $2.00 to $2.20 is a 10% revision only if both forecasts cover the same period and accounting basis. Fiscal-year rollovers, changed analyst coverage and adjusted-versus-GAAP figures can make an apparent revision misleading.
Read what changed: revenue assumptions, margins, taxes or share count. Then check whether subsequent reported results support the forecast. WSS displays available analyst information as research context, not independent confirmation of future results.
Further reading and verification
References explain the underlying concepts; they do not endorse Wall Street Score's model.
Apply this to a real stock
Use Wall Street Score to search a company and compare its score with revenue, earnings, cash, debt, valuation and risks.
Educational research only. Not investment advice.