Hold (Analyst Recommendation)
The term hold is used to identify the stocks a sell-side analyst believes will neither outperform nor underperform the overall market in the near term. A hold rating is neither a bullish nor bearish recommendation, and is associated with a stock the analyst feels will provide a return roughly equal to the overall market’s.
Sell-side analysts are responsible for generating periodic research reports for their clients. These reports highlight recent company news as well as projections of future earnings developed through the use of proprietary models. While these reports contain a lot of detail, they also contain a summary recommendation.
Analyst recommendations are not standardized, but they can be generalized. A hold is neither a recommendation to buy or sell a stock. These are the companies the analyst believes will perform on par with the market, industry and competitors. In addition to hold, similar recommendations include: Neutral, Market Perform, Market Performer, Sector Perform, Peer Perform and Equal Weight. The analyst is essentially telling the investor the company’s stock can be expected to provide the same returns as the stock market or industry over the next twelve to twenty-four months.