What is a recommended increase?
A recommendation increase, also known as an 'upgrade', is the process by which investment analysts or investment advisors adjust their previous investment recommendation for a specific fund or share upwards. This happens when there is more confidence in the future performance of that fund. For example, a recommendation can be increased from 'sell' to 'neutral' or from 'neutral' to 'buy'.
Similar terms:
- Recommendation reduction (downgrade): The opposite of a recommendation increase, where the recommendation is lowered due to reduced expectations.
- Upgrade: A synonym for a recommendation increase, used when an analyst improves their recommendation.
Recommendation increases can influence the price of a share, as they are often interpreted by investors as a positive signal about the future value of the share.