Glossary
Upgrade and Downgrade
A research firm publicly changing its existing rating on a company, moving it up or down a step on that firm's own scale.
An analyst rating is a standing opinion, republished whenever it changes. An upgrade is a move to a more positive rung on that firm's ladder, from Hold to Overweight for instance; a downgrade is a move the other way. The change itself is the news, and it is usually announced before the market opens along with a note setting out the reasoning.
Two things follow from it being a change rather than a state. A firm can downgrade a company it still rates positively, simply moving it from the top rung to the second one, and the headline will read as negative anyway. And the same company can carry an upgrade from one bank and a downgrade from another on the same morning, because the scales and the reasoning belong to each firm separately.
These moves often shift a share price on the day, sometimes sharply, and the size of that move says more about who was surprised than about the company. ConvictionStocks reports what analysts have published and never issues a rating of its own, because a count of published opinions is a fact and a rating is a verdict.
Learn this properly
Lesson 10: Understanding Analyst RatingsWhat Buy, Hold, and Sell ratings actually mean, how analyst consensus works, and why you should use them carefully.
Related terms
- Analyst RatingA professional stock researcher's published opinion on a company, usually summarized as Buy, Hold, or Sell.
- Price TargetAn analyst's published estimate of where a stock's price will sit roughly twelve months from now.
- GuidanceA company's own published expectation for its coming quarters, such as a revenue range, issued alongside its results.
Get the free weekly market digest
The week's biggest movers, every Sunday. No spam.