Investopedia

Downgrade

Filed Under »
Dictionary Says

Definition of 'Downgrade'

A negative change in the rating of a security. This situation occurs when analysts feel that the
future prospects for the security have weakened from the orginal recommendation, usually due to a material and fundamental change in the company's operations, future outlook or industry.
Investopedia Says

Investopedia explains 'Downgrade'

Analysts place recommendations on securities to give their clients or investors a general idea on the expected performance of that security looking forward. These recommendations are adjusted when the basis behind the recommendation changes, such as the price of the stock or newly released data in the company's financial statements.

An analyst may downgrade a stock from a buy to a sell, after the company released information about an Securities and Exchange Commission investigation into the company's operations.

Articles Of Interest

  1. Why There Are Few Sell Ratings On Wall Street

    We outline reasons that may show why enforcing more sell ratings isn't guaranteed to increase Wall Street's objectivity.
  2. The Debt Ratings Debate

    Lack of competition and potential conflicts of interest have called the value of these ratings into question.
  3. Why Bad Bonds Get Good Ratings

    Credit ratings are not the only tool to rely on when assessing bonds. Find out why they sometimes fall short.
  4. January Effect Revives Battered Stocks

    Make sure you buy in low to ride this phenomenon for all it's worth.
  5. 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.
  6. The Ups And Downs Of Biotechnology

    This volatile sector can provide huges gains, but there's also lots of downside.
  7. Don't Judge Your Partner Based On Credit Score

    Credit scores indicate past behavior but don't necessarily reflect present or future behavior, so don't judge you partner solely on credit.
  8. Loopholes In The Dodd-Frank Act

    Certain aspects of Dodd-Frank should be re-examined for their effectiveness.
  9. Could Third World Debt Relief Pay Off?

    Debt is as much a political tool as an economic one. Discover if wholesale debt forgiveness is the answer for developing countries.
  10. The Eurozone Crisis And AAA Ratings

    The eurozone's healthier economies' exposure to weaker economies is threatening their coveted AAA ratings.
comments powered by Disqus
Marketplace
Hot Definitions
  1. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.
  2. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.
  3. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.
  4. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.
  5. Icarus Factor

    The term Icarus factor describes a situation where managers or executives initiate an overly ambitious project which then fails. Fueled by excitement for the project, the executives are unable to reign in their misguided enthusiasm before it is too late to avoid the failure.
  6. Angelina Jolie Stock Index

    An index made up of a selection of stocks from companies associated with actress Angela Jolie.
Trading Center