Investopedia: Buy Side Vs. Sell Side Analysts

Much is made of the "Wall Street analyst" as though it were a uniform job description. In reality, there are significant differences between sell-side and buy-side analysts. True, both spend much of their day researching companies and industries in an effort to handicap the winners or losers. On many fundamental levels, however, the jobs are quite different.

The Sell-Side Job Description
Simply put, the job of a sell-side research analyst is to follow a list of companies, all typically in the same industry, and provide regular research reports to the firm's clients. As part of that process, the analyst will typically build models to project the firms' financial results, as well as speak with customers, suppliers, competitors, and other sources with knowledge of the industry. From the public's standpoint, the ultimate outcome of the analyst's work is a research report, a set of financial estimates, a price target, and a recommendation as to the stock's expected performance. (Learn about the importance of information in the marketplace, and an analyst's role, see What Is The Impact Of Research On Stock Prices?)

In practice the job of an analyst is to convince institutional accounts to direct their trading through the trading desk of the analyst's firm and the job is very much about marketing. In order to capture trading revenue, the analyst must be seen by the buy-side as providing valuable services. Information is clearly valuable, and some analysts will constantly hunt for new information or proprietary angles on the industry. Since nobody cares about the third iteration of the same story, there is a tremendous amount of pressure to be the first to the client with new and different information.

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