Investor Focused

The Role of Broker Research in a Long-Term Investment Strategy

How to incorporate broker research into a disciplined, long-term investment process - what to use, what to question and how to avoid common pitfalls.

Published 13 Sep 2025

Broker research can be a valuable input for long-term investors - if used correctly. Reports bundle company knowledge, models, and a clear thesis (rating + price target). The key is to treat them as inputs, not instructions.

What broker research brings

  • Structured theses: Clear drivers, risks, and valuation frameworks (DCF, multiples, SOTP).
  • Continuous coverage: Regular updates around earnings, guidance, and newsflow.
  • Peer context: Cross-company comparisons and sector trend work.

How long-term investors should use it

  1. Start with the thesis: Does the broker's multi-year story align with your horizon?
  2. Focus on assumptions: Revenues, margins, capital intensity, WACC - stress test the model.
  3. Track changes over time: Upgrades/downgrades and target moves often follow new facts.
  4. Build a watchlist: Use coverage to monitor catalysts and valuation ranges.
  5. Maintain independence: Cross-check against filings, calls, and alternative data.

Common pitfalls

  • Overweighting short-term target changes versus long-term value drivers.
  • Chasing ratings without understanding the underlying narrative and risks.
  • Ignoring position sizing and time horizon mismatch.

Disclaimer: Information only; not investment advice.