Guides

The Difference Between a Buy, Hold, and Sell Recommendation

Broker recommendations are shorthand for an analyst’s view on whether you should buy, hold, or sell a stock. This guide explains what each rating means, their common synonyms and how to interpret them responsibly.

Published 13 Sep 2025

Broker recommendations are shorthand for an analyst’s view on whether an investor should purchase, retain, or dispose of a stock. Here is what they mean:

Buy

A Buy recommendation signals that the analyst expects the stock to outperform the market or its sector peers:

Term Typical Meaning Horizon* Notes / Risk
Buy Analyst expects the stock to deliver a positive, above-market return. ~6–12 months Core positive view; usually paired with a price target implying meaningful upside.
Overweight Expected to outperform its sector/benchmark; analyst suggests a larger-than-index position. ~6–12 months Framed relative to an index weight rather than absolute return.
Outperform Expected to beat peers or the benchmark on a total-return basis. ~6–12 months Similar to Buy, but explicitly relative-performance oriented.
Speculative Buy High-upside Buy with above-average uncertainty/volatility. ~6–12 months Binary or early-stage catalysts; position sizing and risk control are critical.
Top Pick Highest-conviction Buy within the analyst’s coverage list. ~6–12 months Signals stronger preference vs. other Buys; may change as catalysts play out.
Add Mildly positive—incremental buying favored (often on weakness). ~6–12 months Less emphatic than Buy; upside expected but typically lower conviction.

Hold

A Hold recommendation suggests the analyst believes the stock is fairly valued. It does not necessarily mean you should sell - only that significant upside is not expected in the near term:

Term Typical Meaning Horizon* Notes / Risk
Sector Perform Analyst expects the stock to perform in line with its sector peers. ~6–12 months Implies neither notable upside nor downside relative to the sector benchmark.
Neutral Stock is fairly valued; no strong bias to buy or sell at current levels. ~6–12 months Common "middle" stance; analyst may wait for new catalysts or valuation changes.
Hold Maintain existing positions, but don’t add more; upside is limited. ~6–12 months Signals valuation is near target; not a negative view, but lacks conviction to upgrade.
Equal-weight Recommended portfolio weighting matches the index/benchmark; no overweight or underweight. ~6–12 months Relative-performance oriented; suggests holding a "market weight" position in the stock.

Sell

A Sell recommendation means the analyst expects the stock to underperform or decline in value:

Term Typical Meaning Horizon* Notes / Risk
Sell Analyst expects the stock to decline in value or materially underperform peers/market. ~6–12 months Clear negative stance; usually paired with a price target below the current market price.
Underweight Analyst recommends holding a smaller allocation than the benchmark index weight. ~6–12 months Relative view—stock may still rise, but is expected to lag the sector or market.
Underperform Stock is forecast to deliver returns below its peers or the market average. ~6–12 months Less emphatic than outright Sell, but signals downside or weaker relative performance.

*Horizon varies by broker; 6–12 months is a common convention.

Unrated

Unrated recommendations do not convey an active recommendation:

Term Typical Meaning Horizon Notes / Risk
House Stock Firm covers the stock for information purposes but does not assign a Buy/Hold/Sell rating. n/a Common when the broker has a corporate relationship or wants to provide research access without a recommendation.
No Recommendation Analyst or firm publishes commentary or data but explicitly does not give investment advice. n/a Protects from conflicts or compliance restrictions; investors must form their own view.
Not Rated Stock is tracked or mentioned, but not assigned a rating or target price. n/a Often used for secondary coverage, watchlist stocks, or names outside the analyst’s core universe.
Under Review Coverage suspended temporarily, usually due to major events (M&A, restructuring, new information). n/a Analyst withholds a rating until clarity improves; investors should be cautious of uncertainty.

How to Use These Ratings

Recommendations are useful context, but they are certainly not guarantees. Combine broker tips with your own research, company fundamentals, and risk tolerance before making decisions.