Top Wall Street Analysts: Who Are the Best Ones? (2024)

Top Wall Street Analysts Introduction

Well, I’m here to shed some light on some of the best Wall Street analysts. It’s easy to feel bullish when a stockgets an upgrade or bearish when it is downgraded.

But we also have to remember that many of these analyses are based on the same information we all have.

Some analysts view certain catalysts differently, and some have a higher or lower bar, finding a good quarter.

We care about what Wall Street analysts say because investors have a connection to their stocks. We get optimistic when someone is positive and defensive when someone is negative.

It’s nothing to be embarrassed about; it’s just human nature. But how closely should you take these analyst estimates to heart? Let’s try to break down what an analyst upgrade or downgrade means.

These are the headlines we all love to see, right? When the stocks we own get a bullish rating from an analyst, we start thinking about our future potential gains. But more often than not the stock doesn’t quite follow an upwards trajectory.

These upgrades or positive ratings can improve sentiment for the stock in the short-term. But over the long-term, Wall Street analyst ratings have less of an impact. Here’s what it looks like when an analyst is bullish.

Anoverweight rating is more positive than neutral but short of a buy rating. It usually means the analyst believes the stock will slightly outperform the market.

Overweight ratings are the same as the Moderate Buy, Accumulate, and Outperform ratings. While the analyst is bullish on the stock, some issues could likely hamper its performance.

It doesn’t get much clearer than this. A Buy rating means that the analyst is extremely bullish on the stock.

They also expect the stock to outperform the market for the rest of the year greatly.

A Buy rating or Strong Buy rating is as bullish as analysts get. Even if there are some issues with the industry or market, the analyst feels comfortable advising investors to buy the stock immediately.

Bearish headlines for stocks aren’t as enjoyable for investors, but they can often act as a red flag. An analyst may know or see something normal investors overlook regarding forward-looking outlook or comparable industry performance.

These can certainly negatively impactw how bad news can have a snowball effect on on stock prices. Downward pressure seems to have more weight to it than upward pressure. Here’s what it looks like when an analyst is bearish.

You have probably seen many analysts lower their stock price targets this year. Price target downgrades are generally seen as bearish by investors, but it’s not always the case.

The first three months of 2022 have seen the stock market pull back from previous all-time highs.

The S&P 500 hit correction territory, and the NASDAQ fell into a bear market. So what happens when the markets crash like this? It means price targets need to be updated.

A great example happened with the Chinese EV stock Nio (NYSE: NIO). The stock had some lofty price targets for 2022, but analysts made these before the bulk of the correction. Two major analysts downgraded the price targets for Nio, and the stock fell on the news. But diving deeper, investors can see that both analysts have positive ratings for the stock and are bullish on the company in the long term.

Sometimes, price target downgrades or upgrades are simply a necessary adjustment. In the case of Nio, the analyst sentiment should be more of an indication to follow than the actual price targets. The price targets are flashier, but the meat of the analysis lies in the rating the stock gets.

Retail investors are a skeptical group, especially regarding trusting institutions. A common rhetoric amongst investors is that analysts make ratings based on their company’s holdings. The thinking is that if a higher price target is given, it will drive the stock price higher. Although I don’t buy this theory, analyst ratings should be taken with a grain of salt. Always remember there were and still are analysts who are bearish on Tesla (NASDAQ: TSLA).

There were always analysts who were bearish on big tech stocks, so you know these guys and girls never bat 1,000%. But give credit where it’s due. It is a difficult industry, and people tend to remember misses more than hits. If you want my opinion, focus more on the analyst ratings than the price targets. These targets are generally arbitrary or the result of plugging numbers into a formula. However, the sentiment better indicates how the analyst thinks the company and stock will perform.