While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter? According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation. So, validating the Zacks Rank with ABR could go a long way in making a profitable investment decision. In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.

Source: The Star January 28, 2023 04:20 UTC