SUN - Wall Street Bulls Look Optimistic About Sunoco LP: Should You Buy? | Benzinga
When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?
Let's take a look at what these Wall Street heavyweights have to say about Sunoco LP (NYSE: SUN) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.
Sunoco LP currently has an average brokerage recommendation of 2.00, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by eight brokerage firms. An ABR of 2.00 indicates Buy.
Of the eight recommendations that derive the current ABR, three are Strong Buy and two are Buy. Strong Buy and Buy respectively account for 37.5% and 25% of all recommendations.
Brokerage Recommendation Trends for SUN
The ABR suggests buying Sunoco LP, but making an investment decision solely on the basis of this information might not be a good idea. According to several studies, brokerage recommendations have little to no success guiding investors to choose stocks with the most potential for price appreciation.
Do you wonder why? As a result of the vested interest of ...