UK Accounting Glossary
A Wall Street analyst is a security analyst who works for a large broker like Goldman, Sachs. The Wall Street analyst is also known as a sell-side analyst, in contrast to the buy-side analysts employed by mutual funds, pension funds, etc. The Wall Street analyst usually specializes in one industry and “follows” stocks in that sector. The Wall Street analyst issues ratings on these stocks, which tell investors if they should be bought, held, or sold; in the process, the Wall Street analyst also forecasts their per-share earnings. In the early 21st century, the Wall Street analyst faced significant challenges. With the burst of the dot-com bubble, the Wall Street analyst was accused of recommending stocks solely to support brokers’ investment banking business. The huge salaries the Wall Street analyst had commanded — often tied to generating investment banking business — fell significantly. In addition, new SEC rules eliminated some advantages the Wall Street analyst had enjoyed in acquiring market-moving information. Nevertheless, many investors continue to look to the Wall Street analyst for the best appraisal of a stock’s potential.
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This glossary post was last updated: 5th February 2020.