Credit Ratings You See Often (Marketweight / Overweight / Underweight)

Overweight

Overweight will usually signify that the security is expected to outperform either its industry, sector or, even, the market altogether.

An example of an analyst’s rating of overweight would be: The stock’s return is expected to be above the average return of the overall industry over the next eight to 12 months. Specific analyst definitions vary regarding the time frame used and the benchmark the security is compared against.

Marketweight

The marketweight rating indicates that the current credit spread of an instrument is in line with expectations. Being marketweight is similar to having a hold rating, whereas being overweight or underweight are equivalent to the buy and sell titles, respectively.

Underweight

Underweight will usually mean that the security is expected to underperform either its industry, sector, or even the market altogether.

An example of an analysts underweight definition is: The stock’s return is expected to be below the average return of the industry over the next eight to 12 months. Analyst’s definitions vary regarding the time frame used and the benchmark the security is compared against.

Source: http://www.investopedia.com

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