Preparation and Review of Research Reports
What a research report must contain
A research report is a communication that recommends a security or provides an investment view. It must be balanced, factual, and supported. The supervisory analyst reviews for: (1) a clear recommendation and price target linked to a stated valuation method; (2) an investment thesis with identifiable catalysts; (3) risks that could invalidate the thesis; (4) accurate data with sources and dates; (5) disclosures and conflicts; and (6) compliance with rating definitions and internal procedures. Distinguish fact, forecast, and opinion. Every forecast should trace to an assumption.
Traps: a price target that is not derived from the stated methodology; a "Neutral" rating with a target well above the current price; stale prices or estimates; a missing risk section; promissory or exaggerated language; unverified third-party data; disclosures that are generic rather than specific. Reviewers also check consistency between the text, the model, and the rating.
Worked example / rule of thumb: If a report says "our $50 target reflects 12x 2025E EPS of $4.17," then 12 x $4.17 = $50.04, so the math ties. If the text says 15x, the target is wrong. Rule: recompute every target and rating threshold; if the recommendation and target disagree, resolve the inconsistency before publication.