Analyst ratings are frequently used to identify stocks to buy or sell. However, it's important to understand the psychology behind analysts' ratings. Analysts rarely like to be early. That's where investors can find opportunities.
Analysts will frequently issue or reiterate a bearish (Reduce) or neutral (Hold) rating on a stock, even as they raise their price targets. That's a signal to investors that the underlying business looks good, but analysts are waiting to see more.
