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NISM Certifications · NISM-Series-XV: Research Analyst · Qualities of a Good Research Report

A research report gives a target price of ₹600 for a stock quoted at ₹500, but does not state the time horizon, the valuation method or the key assumptions. Which quality of a good research report is most clearly missing?

The missing quality is transparency of methodology and assumptions. A target price without a stated time horizon, valuation approach and key assumptions cannot be tested or understood by the reader, so the recommendation lacks a verifiable basis regardless of charts, brevity or brand.

  1. ATransparency of methodology and assumptionsCorrect
  2. BUse of a large number of charts
  3. CBrevity of the executive summary
  4. DUse of a recognised brand name

Explanation

A target price must be accompanied by the method (for example P/E or DCF), assumptions and the horizon so the reader can replicate or challenge it. Missing these is a lack of transparency; charts, brevity and branding do not remedy it.

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