Merrill Upgrades/Downgrades Impact Stocks Most

by: Bespoke Investment Group

Below we highlight the average one-day change of stocks that receive upgrades or downgrades by select brokerage firms (we excluded all stocks that received upgrades or downgrades on the same day as an earnings report as well as all stocks under $10). Based on our data, recommendation changes by Merrill Lynch have the most impact on stocks, with their average upgrade moving stocks by 3.08% on the day and their average downgrade moving stocks by -4.95%.

While many take upgrades or downgrades by Goldman (NYSE:GS) the most seriously, the stocks don't move as much on the day of their recommendations as they do for a number of other firms.