Does a research report omit the analysts real reason for making a specific recommendation?
For example, Wall Street observers in recent years have coined the term “whisper number” to refer to a quarterly earnings-per-share (EPS) result or quarterly revenue number that some analysts (if not a consensus of analysts) believe is most likely for the firm in question. However, since none of the leading experts covering a stock are prone to updating EPS projections, the public consensus estimate for quarterly earnings remains the same. If an analyst chooses to upgrade a company recommendation based on the rising whisper numbers (or reduces the stock to a hold because the whisper numbers are plummeting), the research report outlining the reason for change needs to address the relevant factors, as required by this Standard.
