5 Equity Research
In a Nutshell
Equity analysis has the aim of separating the «bad» from the good and thus promising stocks.
Analysts draw up estimates for the future fiscal years for a huge range of key performance indicators, especially for sales and profit figures. These gain public relevance.
There are a large number of studies on the quality of the work performed by analysts. The majority of them come to the conclusion that the forecasts by analysts tend to be too optimistic but are better than simple extrapolations.
Communication with analysts plays a central role in Investor Relations.
ESG analyses are becoming increasingly important. On the one hand, specialist ESG rating agencies are producing these analyses, while on the other, ESG analysis criteria are being included in traditional equity research.