Lesson 1 of 7 · 11 min
Company research reports and the analysis framework
A research report turns company and industry analysis into a forecast, a valuation and a recommendation; an initiation report explains the company from scratch, while later reports only update what has changed.
In short
- Analysts value securities with financial statement models: forecast statements that express the analyst's evidence-based view of the future, not a puzzle with one right answer.
- The framework has three blocks: company analysis: past and present → industry and competitive analysis → company analysis: forecasting.
- An initial (initiation) report is long and written for readers who do not yet know the company: business model, industry, competitive position, financial model, valuation, ESG and risks.
- A subsequent report is shorter and written for readers who already know the company: what is new, how forecasts and valuation changed, and updated risks.
- Every report carries a recommendation with a target price and a discussion of risks. Structure, content and tone depend on the analyst's setting.
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