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Overview

Consensus ratings provide a consolidated view of analyst sentiment on a stock by aggregating individual analyst ratings into a single, easy-to-understand metric. This guide explains how we calculate consensus ratings to help you make informed investment decisions.

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How Consensus Ratings Are Calculated

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Step 1: Collecting Analyst Ratings

We gather all available analyst ratings for a given stock. Each rating includes:
  • Analyst Name and Firm Name
  • Rating (e.g., Strong Buy, Buy, Hold, Sell, Strong Sell)
  • Price Target - The analystโ€™s projected stock price
  • Date Updated - When the rating was issued

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Step 2: Filtering for Unique Analysts

To ensure accuracy and avoid double-counting, we only include the most recent rating from each unique analyst-firm combination. Example: If Morgan Stanleyโ€™s analyst John Doe has rated a stock multiple times, only their latest rating is included in the calculation.
Ratings without a valid price target are excluded from the analysis.

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Step 3: Categorizing Ratings

Analyst ratings are categorized into five standard categories:
CategoryNumeric Value
Strong Sell1
Sell2
Hold3
Buy4
Strong Buy5

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Step 4: Aggregating Ratings

We count how many analysts fall into each category. Example Aggregate:
  • Strong Buy: 8 analysts
  • Buy: 12 analysts
  • Hold: 5 analysts
  • Sell: 2 analysts
  • Strong Sell: 1 analyst
Total: 28 unique analysts

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Step 5: Calculating the Consensus Rating Value

The consensus rating value is calculated as a weighted average: 
Consensus Value = (Strong Buy ร— 5 + Buy ร— 4 + Hold ร— 3 + Sell ร— 2 + Strong Sell ร— 1) / Total Analysts
Using the example above: 
Consensus Value = (8ร—5 + 12ร—4 + 5ร—3 + 2ร—2 + 1ร—1) / 28
Consensus Value = (40 + 48 + 15 + 4 + 1) / 28
Consensus Value = 108 / 28
Consensus Value = 3.86

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Step 6: Determining the Consensus Rating

The consensus value is rounded to the nearest whole number and mapped to a rating:
Consensus ValueStandard RatingSimplified Rating
1Strong SellSell
2SellSell
3HoldHold
4BuyBuy
5Strong BuyBuy
In our example: 3.86 rounds to 4, which translates to a โ€œBuyโ€ consensus rating.

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Display Options

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Standard vs. Simplified Ratings

We offer two display formats: Standard (5-category):
  • Strong Sell, Sell, Hold, Buy, Strong Buy
Simplified (3-category):
  • Sell (combines Strong Sell + Sell)
  • Hold
  • Buy (combines Buy + Strong Buy)

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Count vs. Percentage Display

Count Display: Shows the actual number of analysts in each category. Percentage Display: Shows the proportion of analysts in each category, rounded to whole percentages that sum to exactly 100%. Example:
  • Buy: 71% (20 analysts)
  • Hold: 18% (5 analysts)
  • Sell: 11% (3 analysts)

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Price Target Calculations

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Consensus Price Target

The average of all analyst price targets: 
Consensus PT = Sum of all Price Targets / Number of Analysts

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Low and High Price Targets

  • Low Price Target: The lowest price target among all analysts
  • High Price Target: The highest price target among all analysts
These provide a range showing the spectrum of analyst expectations.

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Understanding the Metrics

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Total Analyst Count vs. Unique Analyst Count

  • Total Analyst Count: All ratings collected (may include multiple ratings from the same analyst)
  • Unique Analyst Count: The number of distinct analyst-firm combinations (used for calculations)
The unique count ensures each analystโ€™s voice is counted only once, providing a more accurate consensus.

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Important Considerations

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Rating Freshness

Consensus ratings reflect the most recent analyst opinions. The Updated At timestamp indicates when the consensus was last calculated.

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Coverage Depth

Consensus ratings are more reliable when based on a larger number of unique analysts. Stocks with limited analyst coverage (fewer than 3-5 analysts) may have less stable consensus ratings.

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Rating Distribution

Pay attention to the distribution of ratings, not just the consensus. A stock with 50% Buy and 50% Sell ratings will have a โ€œHoldโ€ consensus, but this masks significant disagreement among analysts.

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Example Calculation Walkthrough

Letโ€™s walk through a complete example for XYZ Corporation:

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Raw Data (10 analysts)

AnalystFirmRatingPrice Target
Analyst AGoldman SachsBuy$150
Analyst BJP MorganStrong Buy$165
Analyst CMorgan StanleyBuy$155
Analyst DBank of AmericaHold$140
Analyst ECitigroupStrong Buy$170
Analyst FWells FargoBuy$152
Analyst GDeutsche BankHold$145
Analyst HBarclaysSell$130
Analyst IUBSBuy$158
Analyst JCredit SuisseStrong Buy$168

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Step-by-Step Calculation

1. Filter for unique analysts: All 10 ratings are unique (10 analysts used) 2. Aggregate counts:
  • Strong Buy: 3
  • Buy: 4
  • Hold: 2
  • Sell: 1
  • Strong Sell: 0
3. Calculate consensus value: 
(3ร—5 + 4ร—4 + 2ร—3 + 1ร—2 + 0ร—1) / 10 = (15 + 16 + 6 + 2 + 0) / 10 = 3.9
4. Determine consensus: 3.9 rounds to 4 = โ€œBuyโ€ 5. Price targets:
  • Consensus PT: (150+165+155+140+170+152+145+130+158+168) / 10 = $153.30
  • Low PT: $130
  • High PT: $170
6. Percentage breakdown:
  • Buy: 70% (Strong Buy 30% + Buy 40%)
  • Hold: 20%
  • Sell: 10%

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Final Consensus Rating Output

{
  "consensusRating": "BUY",
  "consensusRatingValue": 3.9,
  "consensusPriceTarget": 153.30,
  "priceTargetLow": 130,
  "priceTargetHigh": 170,
  "totalAnalysts": 10,
  "uniqueAnalysts": 10,
  "lastUpdated": "2026-01-16T10:30:00Z"
}

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Frequently Asked Questions

If an analyst from the same firm updates their rating multiple times, the total count includes all instances, but only the most recent is used in calculations (reflected in the unique count).
Consensus ratings are recalculated whenever new analyst ratings are published or existing ratings are updated.
Without analyst coverage, a consensus rating cannot be calculated. The stock will show no consensus data.
No. The consensus only changes when analysts issue new ratings or update existing ones.

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