What is an Equity Analyst?

An equity analyst is a person who analyzes financial data and trends for a company. An equity or financial analyst studies public records of businesses in order to predict the company’s future financial needs. The analyst writes reports on company finances and describes the business’s investment potential by assigning financial ratings, such as buy, sell, hold, etc. The equity analyst is also responsible for analyzing the budget and creating a plan to get out of debt, if the company is in such a financial situation.

Daily tasks of a financial analyst are varied, from studying and researching to writing and drafting paperwork and making presentations. In the past, the analyst got most of the company’s financial information from meetings with the managers, but because of new fair disclosure laws, the data must be obtained by the analyst through public records, annual reports and information made available on the internet. Additionally, public conference calls are a means to obtain the data.

An equity analyst works in brokerage, analyst or securities firms, equity or security investment markets, banks, insurance companies, mutual or pension funds, and other businesses. When a financial analyst works in a company that lends, duties are expanded to include investigating lending risks. An equity analyst must be observant and trend-focused. He or she should pay attention to everything about the company, not just the financial sector, because trends in any division of the business will have an impact on that business’s finances.

Tools that a person in this position works with include statistical software, calculators and spreadsheets. Analysts must posses solid analytical, mathematical, computer and communication skills. They must be able to work individually or as a team. With budgets or financial records, an equity analyst often does the research and analysis alone. When large company projects are impacted by a financial situation, such as mergers or takeovers, the financial analyst will work with other departments of the company, interpreting the financial consequences so that the best decision can be made.

An equity analyst usually has either a Master of Finance (MSF) or Master of Business Administration (MBA) degree from graduate level training. Many analysts are also consultants or accountants. To become an equity analyst, one should get the proper degrees and experience. Internships with companies in the financial industry are good ways to get started. Showcasing strong abilities to analyze and communicate can provide an edge over other candidates.