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What financial data are analysed (and how) to come up with a stock recommendation?
The short answer: it depends. The long answer.. Off the top of my head, there are quite a number of factors that an analyst may look at when analyzing a stock, to come up with a recommendation.  Some example factors to look at include: The list goes on.  Quite literally, any and all factors are fair game for a recommendation.  So, the question isn't really what analysts do with financial data, it is what do analysts do with financial data that meets your investment needs? As an example, if you have two analysts, one who is focused on growth stocks, and one who is focused on dividend growth, they may have completely different views on a company.  If both analysts were to analyze Apple (AAPL) 5 years ago, the dividend analyst would likely say SELL or at the most HOLD, because back then Apple did not have a dividend.  However, an analyst focused on growth would likely have said BUY, because Apple appeared to be on a clear upward trend in terms of growth.  Likewise, if you have analysts who are focused on shorting stocks, and ones who are focused on deep value investing, the sell analyst may be selling SELL because they are confident the stock will go down in price, so you can make money on the short position.  Conversely, the deep value investor may be saying BUY, because they believe that based on the companies strong balance sheet, and recent shake-ups in management the stock will eventually turn around.  Two completely different views for the same company: the analyst focused on shorting is looking to make money by capitalizing on falling share price, while the analyst focused on deep value is looking for unloved companies in a tailspin whom s/he believe will turn around, the thesis being that if you dollar-cost-average as the price drops, when it corrects, you'll reap the rewards. That all said, to answer the question about what analysts look for: So really, you should be looking for analysts who align with your investment style, and use those recommendations as a starting point for your own purchases.  Personally, I am a dividend investor, so I have passed many BUY recommendations from analysts and my former broker because those were based on growth stories.  That does not mean that the analysts, my former broker, or myself, are wrong.  But we were all incorrect given the context of how I invest, and what they recommend.