Stock Target Advisor has millions of analyst ratings collected from public sources dating back to 2010 and updates its database daily from public sources.
Every day, we go back in time and determine the accuracy of rating and price targets set by analysts, 6 months and 12 months ago by comparing their target prices and ratings with how the stock performed over the time horizon. As some analysts are good at making predictions for specific sectors, we also calculate their accuracy by each sector.
Then we rank each analyst based on their median rating accuracy and assign them a grade based on their percentile ranking.
Rating Accuracy
A rating is considered accurate if an analyst made a buy or hold recommendation and the stock goes up in price, or if the analyst made a sell recommendation and the stock goes down in price after 6 and 12 months respectively.
Then we do a tally of the rating accuracy to determine the overall analyst rating accuracy.
- A rating accuracy of +100% means that all analyst ratings were correct.
- A rating accuracy of -100% means that all analyst ratings were wrong.
- A rating accuracy of 0% means that 50% of an analyst's ratings were correct, while 50% were wrong.
Target Accuracy
We calculate target accuracy for an analyst price target by dividing the actual price of the stock 6 and 12 months after the analyst target by the analyst price prediction for the stock. A negative number indicates the percentage the stock price was below the analyst target while a positive number indicates the percentage the stock price was above the analyst target.
Rating Return
The rating return on the analyst price target would indicate the return on the stock if an investor had bought the stock when the analyst made a buy or hold recommendation, or the loss everted if an investor sold it when an analyst made a sell rating.
- We calculate the rating return for an analyst price target by dividing the actual price of the stock 6 and 12 months after the analyst target by the price of the stock on the date the price target was set and subtracting a one.
- The return would be positive if the investor bought the stock on a buy/hold recommendation and it went up in price, or if the analyst sold the stock on a sell rating and it went down in price.
- The return would be negative if the investor bought the stock on a buy/hold recommendation and it went down in price, or if the analyst sold the stock on a sell rating and it went up in price.
Analyst Grading
We rank the median rating and target accuracies, and median target returns for each analyst, by sector and overall, and for 6 and 12-month horizons and then assign them a grade based on the table below.
This allows our users to very quickly assess the accuracy of analysts by looking at their grades.
Grade |
Percentile |
Grade |
Percentile |
Grade |
Percentile |
A+ |
97%-100% |
A |
93%-96% |
A- |
90%-92% |
B+ |
87%-89% |
B |
83%-86% |
B- |
80%-82% |
C+ |
77%-79% |
C |
73%-76% |
C- |
70%-72% |
D+ |
67%-69% |
D |
63%-66% |
D- |
60%-62% |
F |
0%-59% |
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