Please enable JavaScript.
Coggle requires JavaScript to display documents.
Lecture 11: Writing equity research reports - Coggle Diagram
Lecture 11: Writing equity research reports
Outline
Contents
Structure
Purpose
Analysts' bias in forecasting
Purpose of equity research reports
Sell- side reports
Buy- side analysts (
clients
: pension funds, hedge funds, investment managers, ...)
Buy- side firms (used
internally
, not distributed publicly)
Sell- side analysts (
brokerage houses
: JP Morgan, Morgan Stanley, ...)
Sell- side firms (
investment banks
): reports are often publicly available with a specific recommendation to buy/ sell/ hold (with expected target price)
types of research reports
sector reports
strategic/ economic reports
specific company
Contents and structure
Teaser page (one page)
highlights
of the report
crisp summary
enable quick understanding of the research
Financial snapshot (one page)
highlights of financial statements
important ratios
Investment thesis (body)
summary of investment ideas (buy/ sell/ hold)
rationale to support the investment ideas (future growth, risk factors, etc)
concise and actionable
Company overview and key investment ideas
Pinpoint revenue sources
Business strategy analysis
Predictions on key items on financial statements, growth, etc.
Earnings forecasts, valuation, key risks (
macro- level & company- level
), Appendix
A stock pitch
Investment thesis: catalysts and risks; why target price will be achieved
Valuation: how you get to the price target?
Statement:
quick abstract
of investment ideas
Analysts' conflicts of interest
page 17
over- optimistic
forecasts => more favorable stock recommendations
herding behavior
: release forecasts similar to those previously announced by other analysts
bold forecasts (page 21)
analyst- firm
social connections (page 22)