Equity Research

What is Equity Research?

Equity Research primarily means analyzing the company’s financials, perform ratio analysis, forecast the financial in excel (financial modeling), and explore scenarios with the objective of making a BUY/SELL stock investment recommendation. Equity Research analyst discusses their research and analysis in their equity research reportsEquity Research ReportsAn equity research report is a document prepared by equity research analysts or financial brokers that focuses on a specific stock, industry, currency, commodity, or fixed-income instrument, as well as a geographic region or country. It includes recommendations on why to buy or sell that stock, as well as DCF modeling, relative valuations, and so on.read more.

Equity Research

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In this in-depth article on Equity Research, we discuss the nuts and bolts of Equity Research.

Equity Research explanation is quite simple. Let us look at these steps below

What is equity research
  1. Equity research is all about finding the valuation of a listed company (Listed companies trade on a stock exchangeStock ExchangeStock exchange refers to a market that facilitates the buying and selling of listed securities such as public company stocks, exchange-traded funds, debt instruments, options, etc., as per the standard regulations and guidelines—for instance, NYSE and NASDAQ.read more like NYSE or NASDAQ etc
  2. Once you have the company under consideration, you look at the economic aspects like GDP, growth rates, the market size of the industry and the competition aspects, etc.
  3. Once you understand the economics behind the business, perform the financial statement analysis of the historical balance sheet, cash flows, and income statement to form an opinion on how the company did in the past.
  4. Based on management’s expectation, historical performances, and industry competition, project the financial statementsFinancial StatementsFinancial statements are written reports prepared by a company's management to present the company's financial affairs over a given period (quarter, six monthly or yearly). These statements, which include the Balance Sheet, Income Statement, Cash Flows, and Shareholders Equity Statement, must be prepared in accordance with prescribed and standardized accounting standards to ensure uniformity in reporting at all levels.read more like the BS, IS, and CFs of the company.  (also called as Financial Modeling in Equity Research)
  5. Use the Equity valuation models like DCFDCFDiscounted cash flow analysis is a method of analyzing the present value of a company, investment, or cash flow by adjusting future cash flows to the time value of money. This analysis assesses the present fair value of assets, projects, or companies by taking into account many factors such as inflation, risk, and cost of capital, as well as analyzing the company's future performance.read more, Relative valuations, a sum of parts valuationSum Of Parts ValuationSum of the Parts Valuation is a valuation method wherein each of the subsidiary or segment of a Company is separately valued & then all of them are added together to estimate the business’s total value. read more the company.
  6. Calculate the Fair price based on the above models and compare the fair price with the Current Market Price (stock exchange)
  7. If the Fair Price < Current Market Price, then the company stocks are overvaluedStocks Are OvervaluedOvervalued Stocks refer to stocks having more current market value than their real earning potential or the P/E Ratio. Overvaluation of stocks might occur due to illogical decision making or deterioration in a Company’s financial health. read more and should be recommended as a SELL.
  8. If the Fair Price > Current Market Price, then the company shares are undervalued and should be recommended as a BUY.

Role of Equity Research

What is the Typical hierarchy in Equity Research firms?

  • A typical hierarchy at an Equity Research firm starts with the Head of Equities/Head of Equities at the top.
  • Thereafter there are Analysts (senior) covering different sectors. Each analyst mostly covers around 10-15 companies in a specific sector.
  • Each Senior analyst may be supported by an Associate, who in turn, may be supported by a couple of Junior Analysts.
Equity Reserach Hierarchy

What is the role of the Head of Research?

  • Head of Research acts as a key member to manage the Equity research analyst team, providing the team with leadership, coaching, and guidance to ensure that the brokerage goals and objectives are met.
  • They oversee research reports, publications; it’s editing as well as monitor the process of analysis and brokerage recommendations.
  • They ensure that adequate support is provided to sales and trading teams.
  • Contribute to Equities by providing expert-level inputs for overall strategy, goals, initiatives, and budgets
  • Responsible for Analyst hiring, compensation, development, and performance management
  • Liaison with fund managers and the research teams

What is the job of the Senior Analyst?

Below is an excerpt from a job requirement of a Senior analyst –

Senior Analyst Job Description

source – FederatedInvestor

Responsibilities of an Associate

Below is the summary of the Associate job description from efinancialcareers

Associate Position
Associate Responsibilities
  • The primary job of an associate is to support the Senior Analyst in the best way possible.
  • An associate has prior experience of around 3 years or so in a similar industry.
  • Updating the financial model, verifying the data, and preparing the valuation models
  • Working on various client requests like a request of data, industry analysis, etc
  • Prepare draft Equity Research Reports (update of results, events, etc.)
  • Work on client requests
  • Participate in meetings and calls with clients on the stock under coverage.

Responsibilities of a Junior Analyst

Here is a snapshot of Junior Equity Analyst’s responsibilities.

Junior Analyst Responsibilites

source – careers.societegenerale.com

  • The main responsibilities of Junior Analyst are to support the Associate in every format.
  • The majority of the work done by Junior Analyst is related to data and excel etc.
  • Also, Junior Analyst may be involved in doing primary research, industry research, coordinating with clients, etc.
  • Maintaining the industry database, charts, graphs, and financial models, etc.

Typical Day at an Equity Research Firm

Previously, I had worked with companies like JPMorgan and CLSA India as an Equity Research Analyst. I covered Indian Oil & Gas sectors with stocks like ONGC, BPCL, HPCL, GAIL, etc.  Below was my typical day as an Equity Research Analyst.

Typical Day at an Equity Research Firm

7:00 am – Reach office

  • Check emails from traders and salespeople
  • Check the stock markets (Asian Markets that open first)
  • Check for all the news related to your sector

7:30 am – 8:00 am Attend Morning Meeting

  • Morning meeting is nothing a formal discussion of the recommendations before the market opens along with Sales & Trading Team
  • In this morning meeting, all analysts present their views on key developments in their sector along with the Head of Research or Equities presenting their views on the general markets.

9:00 am – Market Opens

  • Follow the Market, look for key developments in your sector
  • Try to rationalize if there are any rapid stock price movements

10:00 am – Regular Work

  • Perform regular research analyst duties like Client Requests, Financial Model updates,
  • Follow the News and keep a close check

11:00 am – Regular Work / Client Discussions

  • Discussion with buy side clients for any explanation of research/calls
  • Continue doing your regular maintenance work

3:30 pm – Market Closes

  • Capture the market movements of the company under coverage for the day closure.
  • Check if there is anything that the clients should know and work accordingly.

4:00 pm – Work on New Research Publications

  • Work on the new research piece for publication (next day or in coming days)
  • Generally, research analyst targets at least 1 to 2 research pieces every week.

7:30-8:00 – go Home

Who Pays for Equity Research?

Client Brokerage Relationship

Equity Research Professional Approach

So what is your work like as an Equity Research Professional? Equity Research analysts follow stocks and make recommendations on whether to buy, sell, or hold those securities using Fundamental Analysis. Equity Research is a very challenging job, where an analyst may be required to spend more than 12-14 hours a day.

For creating a professional Equity Research Financial model, an expert analyst recommended approach is as follows –

Economic Analysis / Industry Analysis / Company Analysis


Fundamental Analysis

Colgate Ratio Analysis - Operating Profitability

Preparing a Professional Financial Model

Completing the Balance Sheet

Valuations – DCF

Alibaba FCFF

Valuation – Relative Valuations

Box IPO Comparable Analysis Comp

The common approach is given below.

Research Report

  • Once you have prepared the financial modeling and find the fair valuation of the company, you need to communicate this to your clients through Research Reports. This research report is very professional in nature and is prepared with a lot of caution.
  • Below is a sample of the Equity Research Report. You may learn about Equity Research Report Writing here.https://www.wallstreetmojo.com/wp-content/uploads/2015/03/Reliance-Petroleum.pdf

Equity Research Skills-Set

 Here are excerpts from the Equity Research Job Requirements Description –

Associate Qualifications

Key highlights to note from this excerpt is –

  1. Excel Skills
  2. Financial Modeling
  3. Valuations
  4. Accounting
  5. Report Writing

You can get an in-depth understanding of the skillsets here – Equity Research Skills.

Top Equity Research Firms

Institutional Investors ranking suggests that in 2014, the best research firm was Merril Lynch Bank of America, second place was taken by JPMorgan, and Morgan Stanley came third.

Apart from the top 3 above, there are other notable equity research firms (listed below)

Deutsche BankStandard Chartered Bank
Credit SuisseCornerstone Macro
UBSWolfe Research
BarclaysBNP Paribas Securities
CitiCIMB Securities
NomuraCowen and Co.
Goldman, Sachs & Co.Berenberg Bank
CLSA Asia-Pacific MarketsCitic Securities
Wells Fargo SecuritiesCRT Capital Group
VTB CapitalEmpirical Research Partners
Sberbank CIBJ. Safra Corretora
SantanderKeefe, Bruyette & Woods
ISI GroupKempen & Co.
Daiwa Capital MarketsOtkritie Capital
Jefferies & Co.Raymond James & Associates
Mizuho Securities GroupRenaissance Macro Research
SMBC Nikko SecuritiesSEB Enskilda
Macquarie SecuritiesABG Sundal Collier
HSBCAmherst Securities Group
Banco Português de InvestimentoAntique Stock Broking
Batlivala & Karani Securities IndiaAutonomous Research
BGC PartnersIchiyoshi Research Institute
BMO Capital Markets Corp.ICICI Securities
BOCI ResearchING Financial Markets
Brasil PluralIntermonte
Commerzbank Corporates & MarketsJB Capital Markets
DavyKepler Capital Markets
EFG-HermesLarrainVial Corredora de Bolsa
Equita S.I.M.Lazard Capital Markets
Fidentiis EquitiesMainFirst Bank
GazprombankN+1 Equities
Goodbody StockbrokersOddo Securities
Guggenheim SecuritiesOkasan Securities Co.
Handelsbanken Capital MarketsOppenheimer & Co.
Samsung SecuritiesPetercam
Strategas Research PartnersRedburn Partners
UniCreditWashington Analysis
VontobelZelman & Associates

Equity Research Compensation

  • Junior Analyst/Assistants have a base comp of $45,000 – $50,000 per year (average)
  • Associates have a base salary of $65,000 – $90,000 per year (average) depending on the experience. Additionally, they get a bonus of 50-100% of the base salary (in an average to good year)
  • Senior Analysts generally have a base compensation of $125,000 – $250,000. Their bonus may range from 2-5 times the base compensation.

Equity Research Exit Opportunities

Sell Side research analyst has various Career Opportunities –

Within Equity Research Firm

  • If you joined as an associate, then you can move up the ladder to become a Senior analyst assuming full responsibility for the sector coverage.
  • Later you can move further up to become Head of Research and Head of Equities.

Private Equity Analyst

Investment Banking Analysts

Buy Side Firms

  • Sell side analysts sometimes are also absorbed as buy side analysts (working for Mutual funds, etc.).
  • The buy side analysts assume the responsibility of fund managers over a period of time.

Corporate Finance

  • Sell side analysts work a lot on financial analysis, analyzing company projects, and its effect on the overall company’s financials. Hence, they get into typical Corporate finance roles of large corporates (take care of financial analysis, planning Projects, etc.)
  • Another unique role they get into is Investor relations. As a sell side analyst, they get equipped with the FAQs and how to deal with critical information and its sharing, etc. Due to this, they also become eligible for Investor Relations jobs.


Equity Research essentially means preparing an estimate of company fair valuation for recommending the buy side clients. Though, as a research analyst, you may spend 12-16 hours a day at the office; however, this is a dream job for many who love Finance and Financial Analysis. If you like to work in a challenging and dynamic environment, then this is one career you must consider. Not only equity research job rewards analysts with relatively higher compensation, but also, it provides excellent exit opportunities.

Equity Research Video


What next?

If you learned something new or enjoyed the post, please leave a comment below. Let me know what you think. Many thanks, and take care. Happy Learning!

Reader Interactions


  1. Anoop Kumar says

    Hi Sir, I am a CA and an aspiring investment banker. i have done your beginner course on IB and now this article. I learned a lot and now i am having a deep insight about investment banking. Will keep reading your post. Thanks

    • Dheeraj Vaidya says

      Thanks for your kind words!

  2. carlvin says

    i have gone through your work it is really educative ,i will now be going through it to learn more

  3. Basantkumar Sahu says

    Thanks Dheeraj!!

    It’s crisp and clear fora beginner like me with Societe generale.

    • Dheeraj Vaidya says

      thanks Basantkumar!

    • Janak shahi says

      Thank u very veru much sir ,I learn something new and I want further please

  4. Aqeel says

    Very nice article and provide deep insight about equity research.

    Thank you Dheeraj. I frequently read you published articles.

    • Dheeraj Vaidya says

      Thanks Aqeel. Glad you liked the articles.

  5. Allan Rodrigues says

    Thank you for the post. It was very useful and involved detailed content.

    • Dheeraj Vaidya says

      thanks Allan!

  6. Jinali says

    Hello Dheeraj,
    I am a Chartered Accountant and a CFA level 2 candidate. I have no work experience in equity research till now but i am very much interested and hence persunig CFA. I am a fresher. So what are the chances for a freseher to get into equity research as i am really trying hard to get into one? How to approach those firms?


    • Dheeraj Vaidya says

      Hi Jinali, your chances are very bright already (given you are CA and CFA Level 2 candidate). You should be in a position to get an equity research job soon. Try updating your skills as well to include Financial Modeling, Valuations etc. This will help you get the shortlist for such positions.
      Good luck,

  7. Kevin says

    recommended post, thank u Dheeraj! im working as a junior analyst. Is it possible if i want to take the opportunity as a fund manager after this?

    • Dheeraj Vaidya says

      Hi Kevin, the first move would be to move into the buy side position as an analyst and later you can get promoted to fund manager roles.

  8. Priya kumari says

    Hii Dheeraj,

    I have just completed my MBA in finance,and eagerly planning to grow my career into analyst profile.Your article has really given me an overwiew of how it works,the whole analysis thing.Moreover,I would like to get more updates into the same.



    • Dheeraj Vaidya says

      Thanks Priya, i am happy to see that you liked this equity research article.

  9. Gavin says

    Hello Dheeraj

    Please help me to understand the role of corporate access in the success of an equity analyst?

    • Dheeraj Vaidya says

      Hi Gavin, can you please let me know what you meant by Corporate Access here?

  10. Salem says

    Hi Dheeraj

    Thank you for this brilliant article. I feel well informed now.

    • Dheeraj Vaidya says

      thanks Salem!

  11. Given makaza says

    That was an informative piece dheeraj.. Thanks a lot

    • Dheeraj Vaidya says

      Thanks Given!

  12. Parth Pandit says

    Hi Dheeraj

    First of all thank you for such an informative post on a topic about which finding information is tough. Very well written.

    So I am currently pursuing my MBA in finance (2nd Year). Also I will be appearing for CFA level in Dec 2016.

    Would like to get your insights about how to get an opening in this field as a fresher. Also some tips on facing the CFA level 1 exam.

    • Dheeraj Vaidya says

      Hi Parth, I am glad you found this article valuable. As a fresher, CFA level 1 will help you alot in getting a shortlist. Also, you can learn some practical tangible skills from this professional equity research training.

      Here are some Tips on Facing CFA Level 1 exam

      Hope it helps,

      • Parth Pandit says

        Thank You Dheeraj
        Found the post really helpful especially the part on how to manage your time on different study resources.
        Hope you continue writing this blog.

        • Dheeraj Vaidya says

          thanks Parth for the appreciation. I am glad you like this blog :-)

  13. Sanchay Maity says

    An amazingly well written article. Such a wonderful change from the usual related articles filled with the technical jargon and confusing descriptions. Having said that there are some things that I would like to discuss with you offline. And I have sent you a mail to that effect. Could you please look at it and send me a response if at all you feel it necessary.

    Warm regards,

    • Dheeraj Vaidya says

      Hi Sanjay,

      Thanks. Unfortunately, I am unable to locate your email. Can you please resend me the same?


  14. Varun says

    Hi Dhiraj,
    Very good information..
    Let me know for entry in research part of capital market which is the best equity research training institute.

  15. Jinal says

    Informative post..thanx for d post..need to ask u from wer to start fr equity research analyst..I have interest in stock markets..but I want to make career in dese line..I have completed my CA CS recently.

    • Dheeraj Vaidya says

      Hi Jinal,

      You can start by converting your interest in stock markets to your passion. The starting point would be learn the nuts of bolts of research. To start with you can look at learning Financial Modeling, valuations, accounting and excel.
      you can also consider CFA level 1 exam for the same.


  16. Gaurav says

    Dheeraj, What a wonderful resource you have developed! I am beginning to get to know to about Equity and your blog seems to be the first place to start!

    • Dheeraj Vaidya says

      sure Gaurav.

  17. EJ says

    Thank you Dheeraj! Very insightful guide for career transitioners like myself.

    • Dheeraj Vaidya says

      Thanks. It’s my pleasure :-)

  18. Amber says

    Hello Dheeraj,

    Which valuation method would you recommend? Which is more commonly used by equity analysts. The CFA curriculum places more emphasis on the relative valuation approach. This method is also more convenient for me as most of the inputs that go into the DCF calculation such as beta, equity risk premiums etc are not readily available for my country. Should I calculate these myself?


    • Dheeraj Vaidya says

      Hi Amber, I would prefer Relative valuation due to its ease. However, applying DCF (using the financial modeling forecasting along with FCFF approach) helps us understand company’s business in totality. I typically apply both to find the fair price.

      Also, please note that CFA curriculum hardly covers the DCF valuations using Financial Modeling. do have a look at this Financial Modeling using Excel Guide

  19. v Milind says

    Excellent blog!! Dheeraj, May I request you to kindly send the excel formats.

    Thanks Again for the through & detailed treatise of equity research.


    • Dheeraj Vaidya says

      Hi Milind, did you receive the templates?

  20. Archana says

    Hi Dheeraj,

    Thank you for the article. Can you please provide the list of equity research firms based in India. please


  21. CA GAURAV M LUKKA says

    Hi Dheeraj,

    Nice Article.very useful for person like me who wants to start a career in Capital Market.

    Also if you can share some tactics how to start with equity research.

    CA Gaurav M Lukka

  22. NIDA says

    hello- I am unable to access your excel sheets, is something wrong?
    they are not being sent to my maibox

    • Dheeraj Vaidya says


      I have just resent you the excel sheets. Please check.


      • Megha says

        Hi Dheeraj,

        My name is Megha completed my MBA in Finance fom Pune university in 2012. Graduated in Bsc-chemistry in 2007 , than worked sep 2012 to jan 2014 with barclays shared services in back office role and due to some problem left my job. Now got admission in post graduate program in securities market in National Institute of securities Market,and same time interested in equity research profile/ or as a trader, It will be great help if you can advice is it CFA worth for me ?

        • Dheeraj Vaidya says

          Hi Megha, if you have keen interest in equity research, then CFA will be fantastic addition to your resume.

  23. Afreen says

    Hi Dheeraj,

    I must say you are an exceptional blogger. I have ready 100s of articles and blog on this topic but you have just stricken the right cord . You got that flair of connecting with the readers and write in a way they best understand.This blog is perfect for everyone . Indeed I look forward for more such insightful
    work on investment banking.

    • Dheeraj Vaidya says

      Thanks Afreen :-)

  24. yogesh says

    It’s a great post and very useful. I am 25 yrs old and currently working as a Sbi po I am also planning to give CFA this year, I want to know how to prepare for same.please guide me.


  25. Renard Berry says

    Thanks for the great post. Provides clarity to a career decision I’m sorting through. Currently I’m a banker in the consumer line of business at a big box firm. I want to get into Equity Research however, my BA is in Philosophy and my only financial services designations are series 6/63 ( 2.5 yrs experience) Given these circumstances I understand that I’m at a disadvantage. To close the gap or give myself a legitimate shot in ER I’m considering the CFA or an MBA. I’ve done extensive research on both and it seems by most measures ( opportunity cost, monetary investment, time, preparation) that the CFA is the way to go.
    Just wanted to get your insight on my situation regarding best way to get into ER.
    Thanks in Advance

    • Dheeraj Vaidya says

      Thanks Renard. I think given your background and work experience, CFA seems like the best option.


  26. Joy says

    Great post and very insightful!

    • Dheeraj Vaidya says

      thanks Joy!

  27. Shubham Aggarwal says

    Brother it was a really informative piece for people who want to pursue Eq. Research as a career. Thanks for the writeup.

    • Dheeraj Vaidya says

      Thanks Shubham :-)

  28. danny says

    Hi Dheeraj,

    I’m just starting out in following the markets and putting together some knowledge for potential interviews. I am a qualified accountant, cfa level 2 and I understand financial modelling and valuations.

    How would you go about choosing a sector and firms to follow so that you can pitch stocks comfortably at interviews. would i have to model a few companies and what sources would i use apart from published annual reports? thanks

    • Dheeraj Vaidya says

      Hi Danny, you have great qualifications at hand to crack interviews related to equity research. I think you should choose any sector that you have a good sense of. For example, retail, FMCG are easier sectors as we can walk into malls and stores and understand what’s going on. However, sectors like Oil & Gas, Banking, Pharma are difficult sectors to start as they require domain expertise.

      Other sources (apart from Annual report) could be conference calls, press releases, industry data, investor presentations etc.

      Good luck.

  29. Ken says

    Thank you for sharing your insights about equity research! I really learned a lot from your guide and this article is very useful for everyone interested in Equity research! Thanks again for your help!

    • Dheeraj Vaidya says

      Thanks Ken! Glad you found this article helfpul!

  30. Devi says

    very detailed information. thanks for sharing.

    • Dheeraj says

      Thanks Devi!

  31. Olesya says

    Thank you very much for your article. Equity Research Analyst is my dream job. Keep posting articles like this one please. It is very informative for newbies like me.

    • Dheeraj says

      Thanks Olesya. I am glad you liked the post.

  32. Siddharth says

    Great stuff Dheeraj! Thanks a lot

    • Dheeraj says

      thank you Siddharth. I am glad you liked the article.


  33. Habtamu Debela says

    Dear Dheeraj,

    Your frank opinion is very interested. I am senior manager having exposure to financial services. Passionate about finance and bank for last 13 years. I intend to go for this course. It is very useful for my career and profession.
    Be free to contact on my email address if you have any information.

    With Best Regards,

    Habtamu Debela

    • Dheeraj says

      hello Habtamu,

      which course you are talking about – Equity Research or Investment Banking? given your background of 13 years in Banks, just wanted to understand from you, what is your long term objective?


  34. PV Kanthi Rekha says

    Thank you soo much for posting such a valuable information Sir…

    • Dheeraj says

      Thank you very much :-)

  35. shrikant says

    Dear Dheeraj,

    Your frank opinion is solicited: I am ex banker having exposure to credits. Passionate about capital market for last 30 years and I am long term investor too. I intend to go for this course. Whether it will be useful ? In which capacity I will get opportunity to work? pl inform. I am having lot of my own
    information data-in economics/counting/balance sheet and ratio analysis.
    Pl free to contact on my email Id if necessary.

  36. vaibhav says

    how can i jion & start

    • Dheeraj Vaidya says

      Hi Vaibhav, if you want to join the free investment banking course, then click here.

  37. Nadine says

    This is a very interesting presentation. Thanks for sharing.

    • Dheeraj Vaidya says

      My Pleasure Nadine!

  38. Vivek Pandey says

    HI Dheeraj, Thanks for this article. Its highly informative. People like me who plan their career in equity research for them its very useful. Also could you please throw some light on buy side and sell side analyst. However I know that IB, Corporate Finance & Commercial banking falls in Sell side and Assets management, hedge fund and retail investing falls under buys side. Could you please explain this in short.

  39. Kaustubh says

    Highly informative post.Enjoyed it.I have a query regarding this topic.Do Equity research analysts make use of technical analysis?

    • Dheeraj says

      Hi Kaustubh, thanks :-). You have a good question – Whether equity research analyst use technical analysis? I missed including this completely in my post. Equity Analyst primarily use fundamental analysis and NOT technical analysis for stock recommendation. The reason comes from the clients they server. Equity Research clients are mutual funds, insurance, pension funds etc. These clients mostly have long term time horizon. Using fundamental analysis, an equity analyst is able to guide the clients from long term investment point of view. However, the technical analysis is looking for trading opportunities that are short term in nature.

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