Sell-side analyst

A sell-side analyst is the kind of analyst most investors mean when they talk about Wall Street covering a stock: someone employed by a bank or brokerage who publishes research, earnings estimates, and price targets on public companies. This is different from a buy-side analyst, who works inside an asset manager or hedge fund researching stocks to inform that firm's own trades, rather than publishing research for others to buy.

Because a sell-side analyst's estimates get measured against every other sell-side analyst covering the same stock, there's an incentive to stay close to the consensus. An analyst who breaks from the pack and turns out wrong stands out individually, while one who moves with the herd and turns out wrong shares that miss with everyone else covering the stock. That asymmetry is part of why sell-side estimates tend to drift toward consensus, especially once a stock is already trending in one direction.