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Hold (Analyst Recommendation)

Moneyzine Editor
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Moneyzine Editor
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January 19th, 2024
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Hold (Analyst Recommendation)

Definition

The term hold is used to identify the stocks a sell-side analyst believes will neither outperform nor underperform the overall market in the near term. A hold rating is neither a bullish nor bearish recommendation, and is associated with a stock the analyst feels will provide a return roughly equal to the overall market's.

Explanation

Sell-side analysts are responsible for generating periodic research reports for their clients. These reports highlight recent company news as well as projections of future earnings developed through the use of proprietary models. While these reports contain a lot of detail, they also contain a summary recommendation.

Analyst recommendations are not standardized, but they can be generalized. A hold is neither a recommendation to buy or sell a stock. These are the companies the analyst believes will perform on par with the market, industry and competitors. In addition to hold, similar recommendations include: Neutral, Market Perform, Market Performer, Sector Perform, Peer Perform and Equal Weight. The analyst is essentially telling the investor the company's stock can be expected to provide the same returns as the stock market or industry over the next twelve to twenty-four months.

Related Terms

  • Accumulate (Analyst Recommendation)
    The term accumulate is used to identify the stocks a sell-side analyst believes will perform slightly better than the overall market in the near term. Accumulate is considered a buy recommendation; although it is not considered vitally important for an investor to hold this security in a portfolio of stocks.
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  • Buy-Side Analyst
    The term buy-side analyst refers to an individual that evaluates the future earnings and investment quality of companies on behalf of their clients. Buy-side analysts will normally work for hedge funds, pension plans, mutual funds, high net-worth individuals, and other types of non-brokerage investment firms.
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  • The term sell-side analyst refers to an individual that evaluates the future earnings and investment quality of companies on behalf of a brokerage firm. Sell-side analysts will normally specialize in following the companies in a specific industry.
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  • The term underperform is used to identify the stocks a sell-side analyst believes will disappoint investors relative to the overall market in the near term. An underperform rating is a bearish recommendation, and is associated with a stock the analyst feels investors should not add to their portfolio.
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  • The term strong buy is used to identify the stocks a sell-side analyst believes will significantly outperform the overall market in the near term. A strong buy is a bullish recommendation, and is associated with a stock the analyst feels their clients should hold in their portfolio.
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  • The term strong sell is used to identify the stocks a sell-side analyst believes will significantly underperform relative to the overall market in the near term. A strong sell rating is a bearish recommendation, and is associated with a stock the analyst feels investors should not have in their portfolio.
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