What is a 'Research Report'

A research report is a document prepared by an analyst or strategist who is a part of the investment research team in a stock brokerage or investment bank. A research report may focus on a specific stock or industry sector, a currency, commodity or fixed-income instrument, or on a geographic region or country. Research reports generally, but not always, have actionable recommendations such as investment ideas that investors can act upon.

BREAKING DOWN 'Research Report'

Research reports are produced by a variety of sources, ranging from market research firms to in-house departments at large organizations. When applied to the investment industry, the term usually refers to sell-side research, or investment research produced by brokerage houses. Such research is disseminated to the institutional and retail clients of the brokerage that produces it. Research produced by the buy-side, which includes pension funds, mutual funds and portfolio managers, is usually for internal use only and is not distributed to external parties.

Financial Analyst Research Reports

Financial analysts may produce research reports for the purpose of supporting a particular recommendation, such as whether to buy or sell a particular security or whether a client should consider a particular financial product. For example, an analyst may create a report in regards to a new offering being proposed by a company. The report could include relevant metrics regarding the company itself, such as the number of years they have been in operation as well as the names of key stakeholders, along with statistics regarding the current state of the market in which the company participates. Information regarding overall profitability as well as the intended use of the funds can also be included.

Impact Investment Report Example

On July 5, 2016, Walmart introduced its new payment app, Walmart Pay. Financial analysts were skeptical of the app's relevance, stating the new app did not appear to have enough to offer customers. The app is only designed to work within Walmart stores unlike other payment apps that work within a variety of retail stores. Additionally, questions around the app's ability to secure customer data also raised concerns. The less favorable reports led to Walmart shares dropping by 0.54% as investors considered the worth of the app to Walmart’s profitability.

Conflicts of Interest

While some analysts are functionally unaffiliated, others may be directly or indirectly affiliated with the companies for which they produce reports. Unaffiliated analysts traditionally perform independent research to determine an appropriate recommendation and may have limited concern regarding the outcome.

Affiliated analysts may feel best served by ensuring any research reports portray clients in a favorable light. Additionally, if an analyst is also an investor in the company on which the report is based, he may have personal incentive to avoid topics that may result in a lowered valuation of the securities in which he has invested.

RELATED TERMS
  1. Covered Stock (Coverage)

    A covered stock is a stock for which a sell-side analyst publishes ...
  2. Walmart Effect

    The Walmart Effect is a term used to refer to the economic impact ...
  3. Security Analyst

    A security analyst is a financial professional who studies various ...
  4. Buy Side

    Buy side entails the investing institutions that purchase large ...
  5. Research Note

    A research note is a statement from a brokerage firm or other ...
  6. Zacks Investment Research

    Zacks Investment Research is an investments data and information ...
Related Articles
  1. Investing

    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. Personal Finance

    Walmart Pay vs. The Competition (WMT, AAPL)

    Although Walmart Pay has few competitors, it must improve its app or face pressure to accept better mobile payment services.
  3. Small Business

    Can You Get Rich Creating Apps?

    The good news for both kinds of apps is that people use them a whole lot. The bad news is that the majority of mobile device users download no new apps each month.
  4. Investing

    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.
  5. Tech

    7 Apps Every Financial Analyst Should Have

    Review the seven best mobile apps for professional financial analysts for streamlining up-to-date information and performing data analysis.
  6. Small Business

    The Most Successful App Companies

    The rapidly expanding mobile-app industry is worth billions of dollars. Its growth has led to huge success for some firms and very little for many more.
  7. Financial Advisor

    These Are the Benefits of Investing in Wal-Mart (WMT)

    Understand how Wal-Mart operates and what makes it a good company despite current stock performance. Learn the top four benefits of investing in Wal-Mart.
  8. Financial Advisor

    Career advice: Financial analyst versus research analyst

    Read an in-depth comparison between a career as a financial analyst and a career as a research analyst, including advice on which one to choose.
  9. Personal Finance

    Equity research: Career path and qualifications

    Find out what equity research analysts do on a day-to-day basis, and learn more about the typical career progression for these securities professionals.
  10. Insights

    Android App User Spending to Surpass Apple in 2017

    App analytics firm App Annie says that user app spending across all Android app stores will reach $40 billion this year, surpassing Apple's $40 billion.
RELATED FAQS
  1. What is the difference between a buy-side analyst and a sell-side analyst?

    The main difference between a buy-side analyst and sell-side analyst is the type of firm that employs them and the people ... Read Answer >>
  2. How can you pay your Walmart credit card?

    Learn about the Walmart credit card and how to make payments by a check, online, at Walmart and Sam's Club stores, or over ... Read Answer >>
  3. What kinds of financial analysis jobs are there?

    Read about some of the different types of financial analysts, including those considered to be on the buy side and those ... Read Answer >>
  4. Does the Walmart credit card have an annual fee?

    Learn about the Walmart credit card which comes with no annual fees and a 5 cent per gallon discount at participating U.S. ... Read Answer >>
Hot Definitions
  1. Inflation

    Inflation is the rate at which prices for goods and services is rising and the worth of currency is dropping.
  2. Discount Rate

    Discount rate is the interest rate charged to commercial banks and other depository institutions for loans received from ...
  3. Economies of Scale

    Economies of scale refer to reduced costs per unit that arise from increased total output of a product. For example, a larger ...
  4. Quick Ratio

    The quick ratio measures a company’s ability to meet its short-term obligations with its most liquid assets.
  5. Leverage

    Leverage results from using borrowed capital as a source of funding when investing to expand the firm's asset base and generate ...
  6. Financial Risk

    Financial risk is the possibility that shareholders will lose money when investing in a company if its cash flow fails to ...
Trading Center