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What’s in an Equity Research Report?
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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?
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
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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…
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.
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Equity Research Report Example
Guide to Understanding an Equity Research Report
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What is an Equity Research Report?
Sell-side equity research analysts primarily communicate their ideas through published equity research reports.
In this article, we describe the typical components of a research report and show how they are used by both the buy side and sell side .
Equity research reports are usually available for a fee through financial data providers .
Near the bottom of the article, we include a downloadable sample equity research report by JP Morgan.
Equity Research Report Timing
Quarterly earnings release vs. initiating coverage report.
Barring a new company initiation or an unexpected event, equity research reports tend to immediately precede and follow a company’s quarterly earnings announcements.
That’s because quarterly earnings releases tend to be catalysts for stock price movements, as earnings announcements likely represent the first time in 3 months that a company provides a comprehensive financial update.
Of course, research reports are also released immediately upon a major announcement like an acquisition or a restructuring . Additionally, if an equity research analyst initiates coverage on a new stock, he/she will likely publish a comprehensive initiation piece.
How to Interpret Equity Research Reports
“buy”, “sell” and “hold” ratings.
Equity research reports are one of several types of key documents analysts have to gather before diving into a full-scale financial modeling project. That’s because research reports contain estimates used widely by investment bankers to help drive the assumptions underpinning 3-statement models and other models commonly built on the sell side .
On the buy side , equity research is also widely used. Like investment bankers, buy-side analysts find the insights in sell-side equity research reports helpful. However, equity research is used to help the buy side professional understand the “street consensus,” which is important for determining the extent to which companies have an unrealized value that may justify an investment.
The three main types of ratings ascribed by equity research analysts are the following:
- “Buy” Rating → If an equity research analyst marks a stock as a “Buy”, the rating is a formal recommendation that upon analyzing the stock and the factors that drive price movements, the analyst has determined the stock is a worthwhile investment. The markets tend to interpret the rating as a “Strong Buy”, especially if the report’s findings resonate with investors.
- “Sell” Rating → In order to preserve their existing relationships with the management teams of publicly traded companies, equity analysts must strike the right balance between releasing objective analysis reports (and recommendations) and maintaining an open dialogue with the company’s management team. That said, a “Sell” rating is rather uncommon in occurrence because the market is aware of the relationship dynamics (and will interpret it as a “Strong Sell”). Otherwise, the analyst’s rating can be framed to not cause a steep decline in the market share price of the underlying company, while still releasing their findings to the public.
- “Hold” Rating → The third rating, a “Hold”, is fairly straightforward as it indicates that the analyst concluded that the projected performance of the company is in line with either its historical trajectory, industry comparable companies, or the market as a whole. In other words, there is a lack of a catalyst event that could cause a substantial swing — either up or down — in the share price. As a result, the recommendation is to continue to hold and see if any notable developments emerge, but regardless, continuing to hold the stock not too risky and minimal volatility in pricing should be anticipated in theory.
In addition, two other common ratings are “Underperform” and “Outperform”.
- “Underperform” Rating → The former, an “Underperform”, indicates the stock may lag behind the market, but the near-term slowdown does not necessarily mean that an investor should liquidate their positions, i.e. a moderate sell.
- “Outperform” Rating → The latter, an “Outperform”, is a recommendation to buy a stock because it appears likely to “beat the market.” However, the anticipated excess return above the market return is proportionally minor; hence, the “Buy” rating was not offered, i.e. a moderate buy.
Sell-Side Equity Research Report Anatomy
A full equity research report, as opposed to a short one-page “note”, usually includes:
- Investment Recommendation : The equity research analyst’s investment rating
- Key Takeaways : A one-page summary of what the analyst thinks is about to happen (ahead of an earnings release) or his/her interpretation of the key takeaways from what has just happened (immediately after the earnings release)
- Quarterly Update : Comprehensive detail about the preceding quarter (when a company has just reported earnings)
- Catalysts : Details about the company’s near-term (or long-term) catalysts that are developing are discussed here.
- Financial Exhibits : Snapshots of the analyst’s earnings model and detailed forecasts
Equity Research Report Example: JP Morgan Hulu (PDF)
Use the form below to download a research report from JP Morgan by the analyst covering Hulu.
Get the Sample Equity Research Report
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I was looking for a template In word format, it would be very helpful. Nice webpage!
Thanks, but unfortunately we don’t have a Word template as these research reports have additional built-in functionality (charts, legal disclosures, etc).
was looking for an equity research report template
This article provides a report example, not a template. But we encourage you check out our financial statement modeling course!
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Equity Research Report Template
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Equity research is the process of analyzing a publicly traded company to determine its investment potential. It provides investors with detailed financial analysis and recommendations on whether to buy, hold, or sell a particular investment. Equity research can be conducted by individuals working in an investment bank's equity research division, by employees at a buy-side institution such as a mutual fund or pension fund, or by independent analysts. The primary purpose of equity research is to help investors make informed decisions about where to allocate their capital. Banks often use equity research to support their investment banking and sales and trading clients by providing timely, high-quality information and analysis. Portfolio managers also use equity research at buy-side institutions to build and manage their portfolios. The work of equity researchers is divided into three main categories: company analysis, sector analysis, and stock analysis. In company analysis, equity researchers examine a company's financial statements and track its historical performance. They also assess a company's competitive landscape and determine its prospects. In sector analysis, equity researchers look at the overall industry in which a company
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The Advanced Guide to Equity Research Report Writing
Equity Research is a rewarding career.
To keep up, you need a strong foundation with the judgment to think critically, act independently, and be relentlessly analytical.
That’s why I wrote this guide — to empower you with the equity research(ER) report writing skills to stay ahead in the equity research career.
There is almost NO guide available that teaches you how to write an equity research report.
From textbooks to online video tutorials, you can check and let me know if you find one.
And, I felt that I should write a detailed and step-by-step guide— a guide that really starts at the beginning to equip already-intelligent analysts with a healthy balance of conceptual and practical advice.
The Advanced Guide to Equity Research Report Writing takes your writing to the next level.
Who Is This Guide for?
I wrote this guide for an audience of equity research analysts , investment banking professionals, industry analysts, market research professionals, business management students, and freelance writers.
Most of all, I want you to walk away from this guide feeling confident about your equity report writing skill.
What Is an Equity Research Report
This chapter explains what exactly an ER report is.
The questions like—Who makes it? Who reads and uses it? What are the different types of equity research reports?—are answered clearly and elaborately.
It briefly talks about the various key contents of an ER report.
And lastly, it explains the need to provide a disclaimer at the end of an ER report.
So before understanding how to write an ER report, let’s try to understand what exactly an equity ER is.
FINRA , the Financial Industry Regulatory Authority, defines an equity research report, in Rule 2711 (a)(8) as,
“A written or electronic communication that includes an analysis of equity securities of individual companies or industries, and that provides information reasonably sufficient upon which to base an investment decision.”
Readers of Equity Research, more so than anything else, identify trends that make investment decisions easier to justify.
In simpler words, equity research is a document written and published by a brokerage house or securities firm for its clients to help them to make better decisions regarding which stocks to choose for profitable investment.
The report should be such that it should convince the client to make a decision.
The report should be crisp; the point of view should be clearly structured and articulated concisely.
In the investment industry, equity reports usually refer to ‘sell-side’ research, or investment research created by brokerage houses.
Such research is circulated to the corporate and retail clients of the brokerage house that publishes it.
Research produced by the ‘buy-side’, which includes mutual funds, pension funds, and portfolio managers, is usually for internal use and is not distributed to outside parties.
a. Different types of equity reports
In the above paragraph, we saw terms such as ‘sell-side’ and ‘buy-side’.
Let’s quickly understand what these terms mean:
There are two main types of equity research reports:
i. Sell-Side reports
Sell-side reports are the most common type of equity research reports in circulation.
They are normally produced by investment banks , typically for their clients to guide their investment decisions.
A sell-side analyst works for a brokerage firm or bank which manages individual clients and makes investment recommendations to them.
Sell-side analysts issue the often-heard recommendations of “buy”, “hold”, “neutral”, or “sell”.
These recommendations help clients make decisions to buy or sell stocks.
This is favourable for the brokerage firm as each time a client takes a decision to trade; the brokerage firm gets a commission on the transactions.
Click here to see some examples of sell-side reports
ii. Buy-Side reports
The ‘buy-side’ reports are internal reports, produced for the bank itself, and are guided by differing perspectives and motivations.
A buy-side analyst generally works for a mutual fund or a pension fund company.
They perform research and make recommendations to the money managers of the fund that hires them.
Buy-side analysts will verify 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 is not available to anyone outside the fund.
Within the buy/sell group, there are other types of reports like initiating coverage reports, standard reports, Issue reports, Investor notes, and sector reports.
iii. Initiating coverage reports
The initiating coverage reports are conducted on firms that the bank has begun following and are typically more comprehensive in nature.
Initiating coverage reports analyze a company’s historical financial information, order books, efficiency, SWOT, cash-flows, and future earning potential, basis which it estimates the future earnings of the company and its P/E multiples.
Click here to see some examples of initiating coverage reports
iv. Standard reports
After an initiating report is produced standard reports will follow for as long as the brokerage house continues to track the stock.
Stocks that are tracked are typically part of an index like the SENSEX or are amongst the top stocks in an industry as these are the stocks that investors care about and are traded in larger volumes.
v. Issue reports
These reports are issued when generally companies announce earnings each quarter (Quarterly earnings reports).
vi. Investor notes
These reports are published a few times in between for incremental information and news.
For example – investor conference companies hold a big M&A deal or a major new product announcement from a competitor.
These are usually short-run updates and are typically just quantitative in nature.
vii. Sector reports
A sector report is a document that evaluates a given industry and the companies involved in it.
It is often included as part of a business plan and typically seeks to establish how one company can gain an advantage in industry through detailed research on competition, products, and customers.
Click here to download the sector report
b. Contents of an equity research report
Now that we have understood the different types of equity research reports, let’s try to see the contents of an ER report.
An ER report should not be more than 10 to 15 pages long and should be very crisp and concise.
It should give the reader a clear understanding of the opinion of the analyst writing the report.
An ER report typically has the following contents:
1. Analyst opinion and summary
2. Key highlights of the company
3. A snapshot of the industry
4. Financial ratio analysis
5. Financial Modeling and Valuation analysis
6. Risk factors
7. Disclosure and rationale of rating
Usually, most of the equity research reports have this information; however, there is no hard and fast rule in which an ER report should be written.
We will study in detail (with examples) how to write each of these segments of an ER report in the forthcoming chapters.
c. Importance of Disclaimers in Analyst Reports
As every ER report is an investment document, and investors use it to make decisions for buying or selling securities based on it, it is important for the report to have certain disclaimers to show un-biases of the analyst writing the report.
Some typical disclaimers are as follows:
- Every ER report entirely reflects 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.
Equity research report writing process
Equity Research Report writing
After completing the fundamental analysis, financial statement analysis, ratio analysis, and valuation, the last part of the equity research process is writing equity research reports.
As an equity research analyst, you need to analyze the industry and the company first and then write the stock research report.
This step is paramount in your equity research analysis career .
This is important to write the equity research reports in such a way that your clients understand every word of it.
It’s also important to include relevant analysis that you’ve done in the report.
How to write a report
Let’s see each step of writing an equity research report in detail.
1. Company fundamental analysis
a) Macroeconomic Analysis
b) Checking public information of the company
c) Discussion/ interviews with company management
d) Prepare a 5-year cash flow model and earnings forecast model
e) Review your operational and financial assumptions
f) Assess management and competitive environment, buyers, suppliers, substitutes, porter 5-forces model that tells you the competitive advantage of the company.
2. Company valuation analysis
1. Use intrinsic valuation—Discounted Cash Flow(DCF) method
2. Relative valuation
3. sum-of-the-parts valuation method, wherever required.
Pointers for writing equity research reports
I’ve created a list of pointers purely based on my experience and observations and a bit of research about dos and don’ts while writing an equity research report.
1. A clear view of the company
Before writing the report, have a clear view of the company in terms of—Investment rationale, risk assessment, key growth drivers, cost drivers, and revenue drivers.
Clearly write the company’s name at the top of the report and mention your recommendation—buy, sell, hold.
You can also use the words—outperform, underperform, neutral or accumulate based on your valuation.
Have an image of an equity research report in your mind, and so you won’t miss these details.
Usually, there are templates available in your company and you need to write the report using these templates.
3. Target price
You need to mention the target price based on your valuation along with the recommendation.
4. Investment rationale
Write clearly your investment rationale. Why do you think the share price will go up/down?
5. Share price chart
Include a price chart of the stock that will show the last 52-weeks’ share price movement.
Mention the analysis of the company’s business model and how will it perform in the next 2-3 years.
7. Key ratio analysis
Include important ratio analysis of the company and 52-week high-low share price on a stock exchange.
Include market capitalization, Enterprise Value(EV), Earnings Before Interest Tax and Depreciation (EBITDA), EV/EBITDA, and dividend yield (%)
8. Product profile and segments
Analyze the company’s product profile, its various segments, and brands. Include current sales and forecasted revenue figures, cost, market size, company’s market share, competition, the company’s performance in domestic and other markets.
9. Economy-Industry-Company (E-I-C) Analysis
Cover the company’s fundamental analysis with supportive data.
10. Intrinsic and relative valuation
Perform DCF analysis and relative valuation. Relative valuation should be done with the company’s peers on the basis of Price-Earnings ratio (P/E), Price to Book ratio (P/B), Price to Sales (P/S), Return on Equity (ROE) and Return on Capital Employed (ROCE).
11. Reasoning for recommendation
Write proper reasoning for your recommendation. For example—Why buy the stock or why not to buy the stock. So, your reasoning has to be strong.
12. Unlock the value
Write what can unlock/increase/reduce the value of the company .
13. Legal matters
If the company is battling any case, write what could be its effects on the stock price.
14. Common industry points
While writing industry reports, write the points which are common for all players in the industry, for example, regulatory limitation, excise duty, oil prices, etc.
15. Covering all the areas in an equity research report
While writing the equity research report, assume that the reader is new to the company and he doesn’t have any idea about its business.
So, your report should include precise information about—product, financials, management, market, future plans of the company, growth estimates, and the risk factors of the company.
In short, as an equity research analyst, your equity analysis report writing process should be structured and you should follow the dos and don’ts mentioned in this post.
Sample equity research reports (PDFs):
The Walt Disney Company
If you have any queries, Speak Your Mind.
- Equity research report writing is a skill. You need to build this skill to go to the next level in your career . Top-notch careers in finance–equity research, investment banking , asset management, financial research, Knowledge Process Outsourcing (KPO) units value this skill in high regard.
- There are different types of research reports–sell-side, buy-side, initiating coverage, standard, issue, investor notes, and sector reports. As an analyst, you should know all these reports.
- Contents of an equity research report include Analyst opinion and summary, Key highlights of the company, A snapshot of the industry, Financial and ratio analysis, Valuation analysis, Risk factors, and Disclosure and rationale of rating. I’m going to cover all these sections in detail with examples in the coming chapters.
Now You Try It
I hope you can see the potential of equity research report writing skills for your career.
Yes, it takes hard work to create something great.
But with this skill, you already know ahead of time that your hard work is going to pay off.
I want you to give the skill a try and let me know how it works for you.
If you have a question or thought, leave a comment below and I’ll get right to it.
- Download BIWS Course sample videos here .
- Read Students’ Testimonials here .
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If you want to build a long-term career in Financial Modeling, Investment Banking, Equity Research, and Private Equity, I’m confident these are the only courses you’ll need. Because Brian (BIWS) has created world-class online financial modeling training programs that will be with you FOREVER.
If you purchase BIWS courses through FinanceWalk links, I’ll give you a FREE Bonus of FinanceWalk's Prime Membership ($397 Value).
I see FinanceWalk's Prime Membership as a pretty perfect compliment to BIWS courses – BIWS helps you build financial modeling and investment banking skills and then I will help you build equity research and report writing skills.
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- Sample Research
FREE 9+ Investment Research Report Samples in MS Word | PDF | MS Excel
Robert McKee said: “Do research. Feed your talent. Research not only wins the war on cliche, it’s the key to victory over fear and its cousin, depression.” A quality research process moves consistently forward from calculated pauses and periods of thoughtful slowdown which enable researchers like you to determine whether to revolve and move in a new direction or remain to the course prior to your expedition again. In this article, we are glad to help you in writing your research report as we provide an informative guide and downloadable project report templates to guide you in your research work. Keep on reading!
Investment Research Report
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An investment research report is a useful document that contains the main objectives and scope of the project for investment research work. It gives essential details about the mission and vision of your investment, as well as several latest information and careful analysis concerning the overall performance of stock market, mutual funds, and many more.
The research work for your investment report can be challenging as the vision of success is not always clear, especially when you’re just at the start of the process. But using a systematic method will definitely assist you to be efficient while you define what constitutes success for your investigative work. Below are some easy-to-follow tips that indicate how to design and initiate a research project, as well as managing different kinds of phases in writing an effective research project :
Bill Copeland said that “the trouble with not having a goal is that you can spend your life running up and down the field and never score.” So, you need to be specific and simple when it comes in defining your main objectives in your report . This will push you to work earnestly hard to accomplish your goals.
Carly Fiorina said that “the goal is to transform data into information, and information into insight.” By using various kinds of effective market research tools to collect important data such as Google Keywords, Questback, KeySurvey, Google Analytics, surveys, one-on-one interviews, and observation, it will become easy for you to analyze the collected data.
After collecting the essential data and making a thorough analysis , you need to write a simple draft of your investment research report. Design a clear outline of your report and take note the vital information necessary for the investment.
To finish up your research report , think consciously in writing your last conclusion or summary of your report. Focus on your target goals and demonstrate other highlighted points as you prove the significance of your investment research for the company.
Be direct and straightforward. Show your client the entire details that are significant to your project. Keep your report clear and concise so that your readers will be able to comprehend your overall message.
An investment research is a type of research that involves analyzing the performance of different kinds of financial tools such as mutual funds, stocks, debentures, bonds and many more. This is important for the investor so that he or she can have the perspective of the real performance of his or her company. Plus, it helps in identifying the company’s future performance for price movements.
The four main types of investments are growth investments, shares, property, defensive investments, cash and fixed interest.
Collect your stock research materials so that you can review the financial statements of your company. Then, carefully analyze them. After that, you need to do qualitative research and put your research into context.
Therefore, writing an investment research report is a valuable step in evaluating the performance of a company especially when it comes to investing. Warren Buffett said: “Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold.” Persevere and have a strong will in writing your report. Here are some of our downloadable and printable report samples available in different kinds of formats. Simply click the templates in this article and start downloading now!
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21+ SAMPLE Equity Research Report in PDF | Google Docs | Apple Pages | MS Word
Equity Research Report | Google Docs | Apple Pages | MS Word
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12+ Equity Research Report Templates in PDF | MS Word | XLS
An equity research report is the document prepared by an analyst which provides a recommendation on whether investors should purchase hold, or sell shares of public company. Additionally, it provides an overview of the business, the industry it operates in, the management team, its financial performance risks, and the target price. The equity research is the study of the equities or stocks for the investment purpose. You can also see more on Research Report in Google Docs Templates.
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Step 2: knowing about its products and services, step 3: understanding its relation with customer, step 4: research and development capability, step 5: knowing the industry, more in report templates, get instant access to free & premium , ai tools & daily fresh content.
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