# Broker Ratings

#### Percentage Buy Recommendations

This data item is calculated as sum of strong buy / buy recommendations divided by the total number of recommendations for the stock. Stock brokers regularly put out their recommendations about particular stocks. These recommendations could be either strong buy, buy, hold, sell or strong sell. Each broker covering the stock will usually have one of these recommendations for that stock

Suppose 10 brokers are covering Maruti Suzuki, 3 of them have strong buy recommendation, 2 have buy recommendation, 1 has hold and the rest have sell recommendation. Percentage buy recommendation is calculated as (3+2) / 10 = 50%

Number above 50% is considered to be good because more number of brokers have strong buy / buy recommendation for the stock compared to hold or sell. Closer the number is to 100% the better, indicating higher confidence in the prospects of the stock

#### Percentage Upside

This data item is calculated as percentage difference between target price of the stock and the close price. Stock brokers project the expected price level of the stock over the near term. Average of all these projections for a particular stock is called target price of the stock. Suppose 3 brokers are covering stock XYZ and have projected the stock price to be Rs.112, Rs.128 and Rs.97 over the near term. Target price is calculated as (112+128+97) / 3 = Rs.112.33

Percentage difference between the target price and the current stock price shows the potential upside/downside in the stock. Suppose current market price of stock XYZ is Rs.88, we have calculated target price as Rs.112.33. Percentage upside is calculated as (112.33 / 88) – 1 = 27.65%. A positive number indicates potential upside whereas negative number indicates downside