Is there a difference between a buy and an underperform rating?

While other analysts feel there is little difference between a “buy” and an “outperform” rating – or a “sell” and an “underperform” rating. A buy rating for a stock is a recommendation to purchase as analysts expect that stock price to move higher in the short- to mid-term.

What does underperform mean in a stock rating?

“Underperform” means analysts expect weaker performance compared to the broader market. “Strong sell” is the most negative rating, reserved for stocks analysts expect to perform very poorly. Stock ratings are most helpful when you view them in a broader context.

What is a “strong buy” & “underperform” rating?

“Strong buy” is the rating analysts use for stocks they believe will perform exceptionally well. Analysts rate a stock “outperform” if they believe it will perform better than competitors in the same sector in the coming year. “Underperform” means analysts expect weaker performance compared to the broader market.