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Stock Rating System
Third-Party Independent Research
Standard & Poor’s
Research Methodology
Using Standard & Poor’s STARS (Stock Appreciation Ranking System), Standard & Poor’s analysts evaluate a stock’s potential for price gains over the next six to 12 months and assign a 1- to 5-star rank based on their evaluation of earnings, sales, products, management and other indicators.
The 1- through 5-star categories indicate the following:
- 5 stars: Total return is expected to outperform the total return of the S&P 500 Index by a wide margin, with shares rising in price on an absolute basis.
- 4 stars: Total return is expected to outperform the total return of the S&P 500 Index, with shares rising in price on an absolute basis.
- 3 stars: Total return is expected to closely approximate the total return of the S&P 500 Index, with shares rising in price on an absolute basis.
- 2 stars: Total return is expected to underperform the total return of the S&P 500 Index, and share price is not expected to show a gain.
- 1 star: Total return is expected to underperform the total return of the S&P 500 Index by a wide margin, with shares falling in price on an absolute basis.
Each Standard & Poor’s stock report provides an in-depth look at the covered company’s business, performance and outlook, as well as a broad overview of fundamental, quantitative and technical data. The reports also include a variety of proprietary features and tools that can be used to enhance the investment process, including STARS Rankings described above, Fair Value Rankings and Earnings & Dividend Rankings.
Providers’ ratings scales also vary
To reduce confusion that may result from multiple ratings systems, third-party independent research providers have agreed to display a Buy (1), Hold (2), or Sell (3) rating (comparable to the rating scale used by Citigroup Investment Research). This rating will be in addition to their proprietary ratings that they will continue to display on their research reports. However, on this Web site, ratings of Citigroup Investment Research and third-party independent research providers will be displayed using the comparable scale.
| Standard & Poor’s "STARS" Rating | Displayed as: |
|---|---|
| 5 stars - Buy | 1 - Buy |
| 4 stars - Buy | 1 - Buy |
| 3 stars - Hold | 2 - Hold |
| 2 stars - Sell | 3 - Sell |
| 1 star - Sell | 3 - Sell |
| Standard & Poor’s Fair Value Quantitative Rating | Displayed as: |
|---|---|
| 5 - Buy | 1 - Buy |
| 4 - Buy | 1 - Buy |
| 3 - Hold | 2 - Hold |
| 2 - Sell | 3 - Sell |
| 1 - Sell | 3 - Sell |
For more information, please contact your Financial Advisor.