What is a recommended reduction?

A rating downgrade, also called a 'downgrade', is the process by which investment analysts or investment advisers adjust their previous investment advice for a specific fund or stock downwards. This happens when confidence in the future performance of that fund or stock decreases. An example of this is lowering a rating from 'buy' to 'neutral' or even to 'sell'.

Similar terms:

• Write-down: A broader term that can also refer to lowering the value of assets, but in this case, it is synonymous with a rating downgrade.
• Downgrade: A direct translation of rating downgrade, where the term is often used in the context of credit ratings or investment advice.

Rating downgrades can have a significant impact on a stock's market price, as they are often viewed by investors as a negative signal.