Analyst Sponsorship

AAA

DEFINITION of 'Analyst Sponsorship'

A positive endorsement that an analyst makes regarding a company's stock. Analyst sponsorship can change over time as new information is revealed. The analysts that make these predictions to the public are known as sell-side analysts.

Also known as "analyst recommendation".

INVESTOPEDIA EXPLAINS 'Analyst Sponsorship'

Analyst sponsorship from professional brokerage firms and independent research firms helps investors decide which stocks to purchase. It is important to note that these are only recommendations, and in no way can the analysts guarantee the future price of the stock.

A conflict of interest can occur if the analyst has a position in the stock he or she is sponsoring. It can also occur when analysts are making recommendations on stocks that the investment firm has a vested interest in (i.e. underwriting a new offering). The latter is avoided by keeping analysts and underwriters separated by what is known as a Chinese Wall.

RELATED TERMS
  1. Outperform

    An analyst recommendation meaning a stock is expected to do slightly ...
  2. Forecasting

    The use of historic data to determine the direction of future ...
  3. Underwriting

    1. The process by which investment bankers raise investment capital ...
  4. Analyst

    A financial professional who has expertise in evaluating investments ...
  5. Chinese Wall

    The ethical barrier between different divisions of a financial ...
  6. Buy

    1. A recommendation to purchase a specific security. A buy rating ...
RELATED FAQS
  1. No results found.
Related Articles
  1. Insurance

    What You Need To Know About Financial Analysts

    Thinking about relying on analyst recommendations for your next trade? We'll show you what to watch out for.
  2. Investing Basics

    Analyst Recommendations: Do Sell Ratings Exist?

    Analyst reports can be an investor's best friend - but without knowing how to read them, you won't be able to fully utilize them.
  3. Investing

    Analyst Forecasts Spell Disaster For Some Stocks

    The type of stock that analysts cover can heavily influence their predictions.
  4. Personal Finance

    Want To Know What Disclosures Mean ... In Plain English?

    Disclosures are the fine print in financial reports. We strip away the legal speak to tell you what they really mean.
  5. Fundamental Analysis

    Do-It-Yourself Analyst Predictions

    Regular investors can build their own financial models using the mosaic theory.
  6. Retirement

    Stock Ratings: The Good, The Bad And The Ugly

    Stock ratings are both loved and reviled. Find out why they deserve equal measures of both.
  7. Personal Finance

    Testing 3 Types Of Analysts

    Different clients require different research reports. Which type of analyst do you need?
  8. Stock Analysis

    Why Should You Invest In Stratasys Today?

    When Stratasys pre-announced its fourth-quarter earnings, management highlighted that its MakerBot acquisition was underperforming expectations.
  9. Credit & Loans

    How To Become a Mortgage-Backed Securities Analyst

    Specializing in structured or derivative credit products like mortgage-backed securities requires education and prior experience in the mortgage field.
  10. Investing

    What is Asset Management?

    In the investment world, asset management refers to active management of an investor’s portfolio by a financial services company – usually an investment bank.

You May Also Like

Hot Definitions
  1. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  2. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  3. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  4. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  5. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
  6. Law Of Supply

    A microeconomic law stating that, all other factors being equal, as the price of a good or service increases, the quantity ...
Trading Center