AMZN Amazon.com, Inc.
Amazon.com, Inc. (AMZN) Analyst Ratings
- Buy 55
- Hold 2
- Sell 0
Target prices and buy/sell recommendations are lagging indicators. Analysts raise targets after a stock has already run and cut them after it has already fallen, so the rating tends to describe where a stock has been rather than where it is going.
When all the experts and forecasts agree — something else is going to happen.
Bob Farrell, former chief market analyst at Merrill Lynch
That is what makes this chart worth reading. The share price runs against the share of analysts rating the stock a buy. Most of the time the two move together, which is the lagging part and tells you little. The interesting moments are the extremes — near-unanimous approval, or near-unanimous disgust — and the divergences, where the price turns and the ratings take months to catch up. Farrell's point was that once everyone already agrees, there is nobody left to change their mind.
Share price on the right axis, the net buy rating on the left — buys less sells, over everyone covering the stock, so it runs from +100% when every broker says buy to −100% when every one says sell. Weekly, ten years. Watch where the two pull apart: a rating that keeps climbing while the price rolls over is the crowd catching up to a move that has already happened, and a rating scraping its lows while the price bases is the same thing in reverse.