Analysts usually work for brokerages and research firms that provide coverage of publicly traded companies. Analysts are categorized as either a “buy side” or “sell side” analyst.

Buy-side analysts usually work for companies that sell their research reports for a fee. Buy-side analysts often have a vested interest in the stocks they are covering. Sell-side analysts usually work for brokerage firms that are offering research as a means to encourage large investors to buy specific stocks.

Research analysts usually cover several different companies within a sector which has led to fields of specialization among analysts. Analysts usually provide a one-word rating and a twelve-month price target in their reports.

Analysts provide an EPS estimate as well as revenue estimate before companies report their quarterly earnings. Analysts estimates are based on guidance provided publicly by the company, industry trends, sector rotation, economic trends, and their own analysis.

When a company announces earnings, you will often hear analysts taking part in the earnings call as well as making comments about the company’s quarterly results in the mainstream financial media the next day.

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