How to Write an Equity Research Report ?

Equity research reportsFinancial Analysts or equity research analysts working in brokerage firms or sell-side analysts write equity research reports.

In this post, we’ll see the structure of useful equity research reports.

What is equity research report?

As per the Financial Industry Regulatory Authority (FINRA), the definition of equity research report:

“Research report” means a written or electronic communication which includes an analysis of equity securities of individual companies or industries, and which provides information reasonably sufficient upon which to base an investment decision and includes a recommendation.

If you read the above definition carefully, you’ll understand that the report can be of an individual company or of an industry. The definition also says that the research report should provide reasonably sufficient information and the report should include a recommendation.

Let’s see the process of writing an equity research report in detail.

Equity research report writing process

Equity Research Report writing
Equity Research Report writing

After completing fundamental analysis, financial statement analysis, ratio analysis, and  valuation, the last part in equity research process is writing equity research report.

As an analyst, you need to analyze the industry and the company first and then write the stock research report.

This is important to write the equity research report in such a way that your clients understand every word of it. It’s also important to include relevant analysis that you’ve done in the report.

How to write a report

Let’s see each step of writing equity research report in detail.

1. Company fundamental analysis

a) Macroeconomic Analysis

b) Checking public information of the company

c) Discussion/ interviews with company management

d) Prepare 5-year cash flow model and earnings forecast model

e) Review your operational and financial assumptions

f) Assess management and competitive environment, buyers, suppliers, substitutes, porter 5-forces model that tells you competitive advantage of the company.

2. Company valuation analysis

1. Use intrinsic valuation—Discounted Cash Flow(DCF) method

2. Relative valuation

3. Sum-of-the-parts valuation method, wherever required.

Pointers for writing equity research report

Equity Research Report writing process
Equity Research Report writing process

I’ve created a list of pointers purely based on my experience and observations and a bit of research about dos and don’ts while writing equity research report.

1. Clear view of the company

Before writing the report, have a clear view of the company in terms of—Investment rationale, risk assessment, key growth drivers, cost drivers and revenue drivers .

2. Recommendation/Rating

Clearly write the company’s name at the top of the report and mention your recommendation—buy,sell, hold. You can also use the words—outperform, underperform, neutral or accumulate based on your valuation.

Have an image of an equity research report in your mind, and so you won’t miss these details.

Usually, there are templates available in your company and you need to write the report using these templates.

3. Target price

You need to mention target price based on your valuation along with recommendation.

4. Investment rationale

Write clearly your investment rationale. Why do you think the share price will go up/down?

5. Share price chart

Include a price chart of the stock that will show last 52-weeks’ share price movement.

6.Business model

Mention the analysis of the company’s business model and how will it perform in next 2-3 years.

7. Key ratio analysis

Include important ratio analysis of the company and 52-week high-low share price on a stock exchange. Include market capitalization, Enterprise Value(EV), Earnings Before Interest Tax and Depreciation (EBITDA), EV/EBITDA, and dividend yield (%)

8. Product profile and segments

Analyze the company’s product profile, its various segments and brands. Include current sales and forecasted revenue figures, cost, market size , company’s market share, competition, the company’s performance in domestic and other markets.

9. Economy-Industry-Company (E-I-C) Analysis

Cover company’s fundamental analysis with supportive data.

10. Intrinsic and relative valuation

Perform DCF analysis and relative valuation. Relative valuation should be done with the company’s peers on the basis of Price-Earnings ratio (P/E), Price to Book ratio (P/B), Price to Sales (P/S), Return on Equity (ROE) and Return on Capital Employed (ROCE).

11. Reasoning for recommendation

Write a proper reasoning for your recommendation. For example—Why to buy the stock or why not to buy the stock. So, your reasoning has to be strong.

12. Unlock the value

Write what can unlock/increase/reduce the value of the company.

13. Legal matters

If the company is battling any case, write what could be its effects on the stock price.

14. Common industry points

While writing industry reports, write the points which are common for all players in the industry, for example: regulatory limitation, excise duty, oil prices, etc.

15. Covering all the areas in equity research report

While writing the equity research report, assume that the reader is new to the company and he doesn’t have any idea about its business. So, your report should include precise information about—product, financials, management, market, future plans of the company, growth estimates, and the risk factors of the company.

In short, as an analyst, your eequity analysis report writing process should be structured and you should follow the dos and don’ts mentioned in this post.

Sample equity research reports:

Equity research report PDF

Western Digital Corp


Asian Paints

If you have any queries, Speak Your Mind.

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  1. Josh says

    A good idea is also to look at professionally written equity research reports.

    If you have access to a Bloomberg terminal you can get some by loading the stock you are interested in and typing “BRC”.

    Another good source of free equity research reports online is this site:

    Also a trick I’ve used with good success is to use google’s capability to look for PDF files only. Typing the name of the company plus a term like “price target” or “initiation”.

    Initiation reports tend to be much more useful than the average one pager broker note which is only an update on a specific event, like quarterly results.

  2. Peny says

    Thank you Avadhut for taking your time and walking us into equity research

    I have been invited to a 2nd interview for a junior research analyst position and would appreciate your assistance regarding the appropriateness of the above mentioned steps for my research question.

    The question requires me to give steps to analyse a company listed in the JSE and to give a valuation and recommendation

    Your assistance would be highly appreciated.

  3. Alan Koshy Ninan says


    I want to to fundamental analysis of a company as my internship project. Could anyone please help me out the steps to do the analysis?

    It would be really helpful .

    Thank You.

  4. Mahima says

    Hi Avadhut! Your article is of great help.

    I’ve been given a task to do DCF analysis. Can you help me know where and how do I get the future cash flows of a certain company.


    • says


      DCF analysis is a valuation method of future cash flows discounted at certain rate.

      You need to do historical analysis of the cash flows and then based on your own judgment forecast them. There’s no ready-made data available on it.

      Very soon, I’m going to publish a YouTube video on it. Stay with us.

  5. says

    Thank you for your tips and advice as well as your supportive answers.

    I’ve been thinking of dipping my toes into the world of equity research myself and my question to you is.. is equity research an art or a science?

    e.g. you’ve given a sample research on Asian Paints. Now, according to Angel Broking, the stock is an ‘accumulate’ stock as at 4QFY2011. Their research is as good as the statistics that they use. Say, if XYZ Brokers were to assess the same stock and came up with a different conclusion than that of Angel Broking, which one’s analysis would carry more weight and why?

    I’m asking this in the light of my potential. If I am to take the online course from financewalk, what exactly would I have to do to have an ‘edge’ over other peoples’ research? Would it be a track record of having produced close to accurate suggestions etc etc? Many thanks in advance.

    • says

      Hi Tariq,

      Great question.

      Apart from technical skills, personal judgement/ gut feel is an important skill in equity research. You will come across “Buy” and “Sell” on the same stock by two different analysts.

      The data or ‘statistics’ is same for both analysts. However, the analysis and interpretation of it may be different for these two analysts for the same stock. That’s why it’s the skill that brokerage houses look for in analysts while hiring.

      If you’re doing data analysis, then it’s science, but, when you apply your own judgment (which comes through experience), it becomes an art.

      Hope this helps.

  6. Mehul Patel says

    Hello Sir,
    I found your article very interesting and useful. Thanks for sharing. I have some questions and I will be grateful to you if you can help me to sort out them. My questions are: What one should do to start his own Financial Research and Analysis firm? What are the requirements for it? Like Qualification & Experience? Can one with no specific experience in research but with knowledge can start? Which Ministry of Corporate Affairs Registration is required for the R&A firm?

    I hope to hear from you soon.

    Thanks & Warm Regards,
    Mehul Patel

    • says

      Hi Mehul,

      Great question.

      I think experience and skills are more important than qualification. Find clients who want to outsource their research. If you want to focus Indian clients, you should contact brokerage houses and convince them with your ideas and capacity to deliver.

      If you want to start a KPO, you should focus on US, UK clients especially hedge funds and portfolio management firms. It’s difficult at this stage as KPO market is not good now.

      You may start bidding for projects on sites like Elance and then once you build your credibility and rating, build rapport with the client and then bid for bigger projects.

      Initially you can start as a sole proprietorship. If you want to expand then you can register as a private limited company. You should talk to your CA for this.

      Wish you all the best.

  7. RG says

    Hi Avadhut,

    First of all thank you for such a wonderful article…!

    Avadhut, I am a Chartered Accountant with two years of experience in Financial Planning and Analysis in infra and travel industry. I basically look after forecasting, budgeting, Variance analysis etc.

    But i have a strong interest in valuations(DCF, relative) and equity research, and so i strongly want to move into this line. I am also pursuing CFA level 1, and will be writing June 2014 paper. Please suggest me, as to how can i enter this line, as i am really very very keen in getting into the same. I have also done a course in Financial Modelling.

    Whenever i apply for these jobs, they reject my application on the basis that i do not have prior experience in the same.


    Please help me out..!


  8. says

    Hello Mr.Avdhut
    I am Mahesh Jogdand. I am a chartered accountant.Currently i am working in a corporate advisory company.My role involves arranging funds for corporates through banks/FI`s etc. Corporate finance in-short you can say.
    Its been a 2 years since i have been working.Now i would like to join some course which will help me in my career from here.

    Which course do you think would be more useful for me.?

    I always wanted to become equity research analyst,but given the circumstances i do not think it as a very good option.
    I also think Investment banking/merger-acquisition would be a better option for me.
    Please guide me.

  9. Gavin MacMahon says

    I have 14 years experience in Fund administration and I am a CFA Charterholder since 2010. What is the best way for me to reposition myself towards a career in Equity research analysis. I am currently based in Dublin Ireland. Thanks in advance for your advice.

    • says

      Hi Gavin,

      You can try applying for equity research position in buy side firms, portfolio management, maybe in your current company. I think you have knowledge and experience of markets which is a big advantage for equity research positions.

  10. Regan Barua says

    Hi Avadhut,
    I have been writing articles on.companies listed on NYSE and NASDAQ for more than six months now. Do you know any platform wherein I can do the same for companies listed on NSE and BSE?


      • Regan Barua says

        Hi Avadhut,
        I am looking in for writing paid articles.
        Also do you know any database provider which provides equity research reports of leading brokerage houses at “reasonable cost”?

        • says

          No idea where you can write paid articles for NSE/BSE listed companies.
          You can check brokerage houses like Motilal Oswal, Kotak Securities, Angel, Edelweisss. Also check CRISIL website and NSE/BSE website for equity reports.

  11. Partha Mazumder says

    Hi Avadhut,

    Thanks for sharing all the interesting articles. Can you just throw some light on how to set up a KPO related to equity research.

    Thanks in advance

  12. Sajal Banerjee says

    Hi this is Sajal have gone through your study it was really wonderful & would like thanks for this lovely report.I am really grateful to you .
    I am just complete MBA in finance & also completed NSE certification on(Derivatives Market Dealers Module).
    so I want to know how can I establish myself in the financial field.

    I would like to request if you give some sample how to start to write a report then it will be blessed for me.

    Thanks & Regards


    Hello sir, i went through the site it is really great. I am doing my MBA and now I am doing my summer internship project. The internship tenure is of 3 months. I would like to request you that if you can guide me what project should I take up in terms of equity research, where I can learn something about equity research in this 3 months. I know 3 months is not at all enough to know about equity research but help me and guide me what project can I take up. I would be extremely thankful to you. My Internship starts from 15th march 2013 to june 2013.

    • says

      Hi Prasenjit,

      Here are some things you can take up for your summer project:

      1. Sector analysis ( Focus on 1-2 sectors and select top 3 undervalued companies in each one)
      2. Take index – S&P 500 and select top 10 companies to invest in using stock picking parameters.
      3. Focus on Mid Caps and study their businesses, analyze financial strength and potential investment opportunities.

      Hope this helps.


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