Research Report

A research report is a document prepared by an analyst or strategist that evaluates a specific security, sector, asset class, or geographic market. In investment contexts, these reports commonly offer data, analysis, and actionable recommendations—such as buy, sell, or hold—intended to help investors make decisions.

How research reports are produced

Research reports come from a variety of sources:
* Sell-side (brokerage or investment bank) research: Produced for distribution to the firm’s institutional and retail clients.
* Buy-side research: Created by pension funds, mutual funds, and portfolio managers for internal use.
* Independent market research firms: Provide specialized or thematic research to paying clients.

Typical elements in a report:
* Scope and focus (company, industry, currency, commodity, fixed income, or region)
* Company background and key stakeholders
* Market context and relevant industry statistics
* Financial metrics and profitability analysis
* Valuation and forecasts
* Investment thesis and recommended actions
* Risks and assumptions

Financial analyst reports

Analysts use quantitative and qualitative data to support recommendations. A company-focused report often includes:
* Operational history and leadership
* Market share and competitive positioning
* Revenue, earnings, and margin trends
* Use of proceeds for capital raises or new offerings
* Scenario analysis and target prices

These reports aim to translate research into clear investment ideas that clients can act on.

Impact and evidence

The influence of research reports is debated. Proponents argue that analysts synthesize information and market context that add value to investor decisions. Critics—grounded in the Efficient Market Hypothesis—contend that publicly available research should already be priced into securities.

Empirical studies offer mixed results; some find that analyst recommendations can affect short-term market behavior and trading decisions, particularly in localized or less-transparent markets.

Conflicts of interest

Potential conflicts can affect the objectivity of a report:
* Affiliated analysts (those tied to a firm with business relationships to the subject company) may face pressure to produce favorable coverage.
* Analysts who hold positions in a company’s securities may have personal incentives to avoid negative conclusions.
* Brokerage and investment banking relationships, underwriting roles, or corporate advisory work can bias recommendations.

Independent or unaffiliated analysts generally face fewer direct incentives to skew findings, but all research consumers should consider possible conflicts when weighing recommendations.

Key takeaways

• Research reports summarize analysis and often include actionable investment recommendations.
• Sources vary: sell-side reports are widely distributed, while buy-side research is usually internal.
• Reports typically combine company background, financial metrics, market context, and a clear investment thesis.
• Evidence on the value of analyst research is mixed; recommendations can affect short-term decisions.
• Always evaluate potential conflicts of interest when using research to inform investment choices.