Equity Analyst
Equity analysts research and evaluate stocks and provide forecasts on their potential future performance to help investors make informed decisions.
What does an Equity Analyst do?
An Equity Analyst studies stocks to help investors decide whether to buy, hold, or sell them. They research companies’ financial health, industry trends, and market conditions. Based on their findings, they forecast future performance and write reports with investment recommendations.
Equity analysts work for investment firms, banks, or brokerages, either advising clients or supporting portfolio managers.
Key skills
- Analytical and quantitative
- Attention to detail
- Communication
- Curiosity
Other valuable attributes of an Equity Analyst
- Industry or sector expertise (including awareness of the regulatory environment).
- Awareness of global current events.
- Collaboration and teamwork.
- Excellent writing and presentation skills.
Different types of Equity Analyst
Sell-side Equity Analysts
- Work for the research arm of investment banks whose clients include institutional investors.
- Provide in-depth analyses of stocks and market insights for clients.
- Based on their analysis, may assign a rating to a stock such as a "buy", "sell" or "hold".
Sell-side analysts’ recommendations can significantly influence market behavior, especially when these lead to substantial price shifts. With experience, they may move into senior research roles, investment banking, or client advisory positions.
Buy-side Equity Analysts
- Work for institutions that manage money on behalf of clients such as asset managers, pension funds, and insurance companies.
- Analyze stocks to help their firm invest wisely and manage portfolios.
- Collaborate closely with portfolio managers and provide internal recommendations to them on which stocks to buy, hold, or sell.
Buy-side analysts’ insights and recommendations can have significant influence on portfolio performance and long-term returns. As they gain experience, they often move into investment decision making roles such as portfolio manager or asset allocator.
Becoming an Equity Analyst
Qualifications
Most entry-level Equity Analyst roles require a bachelor’s degree in Finance, Accounting, Economics, Business Administration, or a related field like Statistics or general Business. Many Equity Analyst recruitment postings look for candidates with the CFA® charter.
Who hires an Equity Analyst?
Equity Analysts could be employed by large institutions such as:
- Investment banks
- Asset managers
- Mutual funds
- Hedge funds
- Pension funds
- Securities firms
- Investment firms
Check out a typical job description
Common job descriptions for Equity Analyst roles, whether buy-side or sell-side, include the following key responsibilities:
- Conducting in-depth research on companies and building financial models
- Developing recommendations and presenting them to portfolio managers or clients
- Translating financial data into detailed presentations and easy-to-understand reports
- Building relationships and interacting with equity sales and trading, institutional clients, investor relations, company management and other industry participants
- Monitoring the market developments, earnings releases, macroeconomic trends and industry dynamics
Now let’s talk career progression
Where this role could take you
The next step on your career path is likely to be a Senior Equity Analyst. This could involve supervising Junior Analysts and using their research findings to finalize client recommendations or insights.
As you move up in seniority, you will have more opportunities to interact with and present to clients. You may also have opportunities to participate in international road shows and attend conferences.
Tips for progressing to a senior role
- Develop deep industry expertise – specialize in a sector and build your credibility
- Cultivate access to the management teams of the companies you are covering
- Show you can think strategically on behalf of clients
- Pursue professional certifications, such as the CFA Program, to continuously expand and deepen your knowledge and skills
- Sharpen your presentation skills
Your future
Equity Analysts possess highly transferable skills that allow them to move across various areas of the finance industry such as investment banking, asset management, insurance, hedge funds, and private equity.
On the buy side, a common career path is progressing into roles like Portfolio Manager or Fund Manager, where you’ll oversee investment portfolios and make decisions on behalf of investors or beneficiaries.
Analysts may also advance to lead specialized research teams focused on industries, regional or global markets.
The right role for you?
The work can be demanding. It’s a high-stakes role where you are expected to be highly accurate as your analyses form the basis of multi-million/billion-dollar investment decisions. Errors or missed calls may impact your reputation and career progression.
Markets also evolve rapidly, so you need to constantly stay updated on economic trends, company news, and financial regulations.
Much of the work follows a recurring cycle – earnings calls, updates, revisions – which may feel repetitive over time.
Find your fit in finance
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