Definition of Neutral Rating
By Dave Manuel
What is the definition of a "neutral" rating? What does it mean if a brokerage issues a "neutral" rating for a stock?
"Neutral" doesn't mean sell, and "neutral" doesn't mean buy.
Instead, when a brokerage issues a "neutral" rating, this means that they expect the stock to perform in line with the expected returns of the market.
"Outperform" means that a stock is expected to perform better than the market, while "underperform" means that a stock is expected to lag the returns of the market.
Another name for a neutral rating is "market perform".
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